Milk Production Continues Shrinking
January 24, 2022
Milk production soured last month as U.S. cows produced 18.825 billion pounds, 0.15% less than December 2020, according to USDA’s Milk Production report released this afternoon. The U.S. herd fell to 9.375 million cows, a drop of 7,000 from November 2021 and the seventh consecutive month of declines. Cow numbers have not been this low since August 2020. However, milk yields rose, with average December production totaling 2,008 lbs. per cow, 0.6% more than a year ago.
Washington and New Mexico experienced year-over-year milk production drops of 7.3% and 15%, respectively. Herds shrunk in these areas as co-ops began to manage supply, and cows were relocated to states with fewer restrictions and newer facilities. In the top dairy states of California and Wisconsin, milk production grew by 2.2% and 1.8%, respectively, with California’s growth due to increased milk yields year over year.
Decreasing milk supplies likely led to the tightening butter stocks reported in today’s USDA Cold Storage report. Butter stocks fell for the fifth consecutive month, totaling 199 million pounds, down an astounding 27% from a year ago. Butter stocks have not been below 200 million pounds since December 2019. They bucked the usual trend of increasing from November to December. and fell 11.4 million pounds. Throughout December, Dairy Market News reported butter makers were short on milk and labor,
causing churns to run below capacity.
On the other hand, total cheese stocks equaled 1.445 billion pounds, a rise of nearly 49 million pounds from the same month a year ago, and a December record. American cheese stocks tipped the scales at 846.3 million pounds, increasing 5.6% vs. December 2020.
Today’s reports continue the story of declining milk production and decreasing stocks, supporting the current pricing environment and pointing to increased prices ahead.