Tighter Milk Supplies and Lower Milk Solids Output Stiffen Competition

Tighter milk supplies and lower milk solids output have stiffened competition among dairy processors. While there are no obvious winners, there is a clear loser. Around the country, lines at the dryer are short, and output is waning. In July, combined production of nonfat dry milk (NDM) and skim milk powder (SMP) dropped to 184 million pounds, down 10.6% from the prior year. So far in 2024, milk powder output is 14.6% behind the 2023 pace and off to the slowest start since 2013. Meanwhile, NDM exports accelerated in July, outpacing the prior year by 10.3%. Shipments to Mexico jumped 20% year over year, and exports to the Philippines – now our second-largest market – leapt 79%. Manufacturers’ stocks of NDM dipped to 269.7 million pounds, down slightly from June but up 0.4% compared to July 2023.

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