Weaker Milk Checks Expected as Milk Production Surges

ZISK
Oct 20
1 min read

Milk production is strong in the U.S. — up more than 4% versus the prior year in some recent months. While partially supported by easy to overcome prior year comparable datapoints, when output was negatively impacted by the avian influenza outbreak, the volume growth is the strongest noted since 2021 and follows three years of relatively flat production noted in 2022-2024. In addition to growing volume, components continue to increase as well, with butterfat and protein levels climbing steadily in recent years, allowing processors to make even more dairy products from their milk intake. This abundant supply — seen in nearly all regions of the country — has weighed on prices in recent weeks, with lower milk checks expected for dairy farmers expected to hit mailboxes in Q4.

Globally, the picture is similar — with nearly every key producing region seeing production expand as well. After a slow start to the year, the EU is seeing additional milk in recent months. High milk prices in New Zealand are supporting what could be a record-breaking milk production season, with all eyes on October volume — the typical yearly peak in the country. It is rare for all key global dairy areas to see volume expand simultaneously, but profitable milk prices and the lack of any negative weather event currently continues to support output around the globe.

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