U.S. Milk Production Growth Slows
September 20, 2021
Scorching hot temperatures in August dragged milk production growth in the United States down to the slowest rate seen since June 2020. Milk production in August totaled 18.84 billion pounds, according to USDA’s Milk Production report released this afternoon. Output for the month was 1.1% higher than in August 2020, driven by a national dairy herd that remains meaningfully larger than last year.
The U.S. dairy herd totaled 9.48 million cows in August. And while the herd was still 106,000 cows larger than during the same month last year, cow numbers declined for the third consecutive month, including a loss of 19,000 cows between July and August. This decrease is tied for the largest month-to-month decline since September 2018. New Mexico alone saw its dairy herd shrink by 10,000 animals. As producers come under increasing margin pressure – sandwiched between elevated operating costs and volatile milk prices – the shrinking herd reflects producer intentions to rebalance their operations and move less- productive animals out of the herd.
August wrapped up the hottest summer on record, and challenging climatic conditions took a toll on yields. National milk per cow fell by one pound compared to last year to 1,987 pounds per cow, a rare year-over-year decline. However, the impact was wildly uneven across the country. In New Mexico, milk per cow plummeted by 100 pounds per cow. Meanwhile in Texas, yields also tumbled, falling by 45 pounds per cow as producers struggled to cope with unseasonably wet conditions. Important yield losses were also seen in Washington, Florida, and Iowa. At the same time, sizzling temperatures in California and Utah did little to stem productivity growth, with yields rising by 15 and 20 pounds per cow, respectively.
After months of unabated increases, national milk production appears to be changing course. Slower milk production growth in the coming months has the potential to introduce additional tension into the markets and buoy dairy prices, particularly for Class IV products.