U.S. milk production inched higher ever so slightly in July. The Agriculture Department’s latest Milk Production report showed preliminary output at 18.3 billion pounds, up fractionally from July 2018. Output in the 24 top producing states hit 17.5 billion pounds, up 0.1%, with 11 out of the 24 in negative territory. Revisions added 26 million pounds to the original June total, now put at 18.26 billion pounds, down 0.2% from June 2018.
July cow numbers in the 50 states totaled 9.31 million head, down 9,000 from June and 82,000 head below a year ago. Output per cow averaged 1,969 pounds, up 10 pounds from June and 17 pounds above a year ago.
California output was up 2.5% from a year ago, thanks to a nice 55 pound gain per cow offsetting the 6,000 fewer cows milked. Wisconsin was down 1.0% on 6,000 fewer cows and a 10 pound drop per cow.
Virginia saw the biggest decrease, down 11.2% on 9,000 fewer cows. Arizona was down 6.7%, on 13,000 fewer cows plus a 10 pound loss per cow.
Idaho was up 2.1% on 10,000 more cows and a 10 pound gain per cow. New York was up 0.3%, thanks to 5,000 additional cows, however output per cow was down 10 pounds. Pennsylvania saw its 17th consecutive month that output was below a year ago, down 68 million pounds or 7.6% from a year ago as 35,000 fewer cows were milked and output per cow was off 15 pounds. Minnesota was up 1.0%, despite a drop of 5,000 cows. Output per cow was up 40 pounds.
Michigan was up 0.6% on a 5 pound gain per cow and 2,000 more cows. New Mexico was down 0.9%, on 5,000 fewer cows but output per cow was up 15 pounds. Texas was up 5.8%, easy to do with 27,000 more cows and 15 pounds more per cow. Vermont was up 1.3% on a nice 40 pound gain per cow though cow numbers were down 1,000. Florida was down 1.1%, despite a 35 pound gain per cow but 4,000 fewer cows were milked. Washington State was up 0.2%, on 1,000 more cows but output per cow was down 5 pounds from a year ago.
FC Stone says fat and protein were both a little weaker than expected but still up from last year. Taking into consideration components, milk production was up 0.4% versus last year.
The Agriculture Department’s latest Livestock, Dairy, and Poultry Outlook, issued Aug. 16, mirrored milk price and production projections in the Aug. 12 World Agricultural Supply and Demand Estimates report but also reports that the number of replacement heifers on July 1 was lower than in July 2018. Milk replacement heifers were estimated at 4.1 million as of July 1, a drop of 601,500 from Jan. 1, the largest January to July decline since the July 1 series began in 1973. The ratio of heifers to milk cows fell to 44.1%, the lowest since 2009.
The decline in milk cows in the second half of 2019 is expected to continue into early 2020, before the inventory begins to increase; therefore, the estimate for the size of the milking herd in 2020 was lowered 5,000 head to 9.35 million. Similarly, the forecast for milk per cow was lowered 35 pounds to 23,675.
The Agriculture Department announced the September Federal order Class I base milk price at $17.85 per hundredweight, down 4 cents from August but $3.00 above September 2018 and the highest September Class I since 2014. It equates to $1.53 per gallon, up from $1.28 a year ago. The nine month average stands at $16.51, up from $14.58 a year ago and $16.41 in 2017.
You’ll recall last week I reported that June fluid milk sales were down 4.1% from a year ago. Part of the downfall is due to the rising popularity of plant-based beverages but the Aug. 16 Dairy and Food Market Analyst reported that plant-based milk product sales have slowed some though they are still rising.
“Year-to-date, sales of alternative milks have only increased by 4.4% after rising by 9.5% in 2018,” the DFMA stated. “Notably, almond milk sales have increased by just 7.0% so far this year; half the 14% increase experienced in 2018.”
The DFMA also reported that “Dairy Farmers of America has launched a new beverage that combines 50% milk with 50% of either oat milk or almond milk. The product is launched under the brand name Live Real Farms. Dairy and plant-based mixes are an emerging trend. A month ago, Chobani launched a line of dairy-based yogurts with nut-butters,” according to the DFMA.
In politics, Robert Lighthizer, the U.S. trade representative, and Agriculture Secretary Sonny Purdue were called upon this week to “capitalize on the conclusion of Japan’s national elections and quickly finalize a strong trade deal with Japan in order to secure critical market access for the dairy industry here at home.”
The call was made by the National Milk Producers Federation, U.S. Dairy Export Council, 70 dairy companies, and farmer-owned cooperatives, and associations. A joint press release stated; “Given that Japan is an established market with a growing demand for dairy products, the successful negotiation of a robust trade agreement with Japan will bring a much-needed boost to the economic health of the U.S. dairy industry and set our industry up on a path to compete effectively there moving forward. Securing robust dairy export opportunities into this overseas market will be critical to restoring confidence for our dairy farmers and processors across the country.”
“The continued success of the U.S. dairy industry relies on stable export opportunities to markets abroad and Japan represents a major opportunity to expand growth. However, the Japan-EU agreement and the Comprehensive and Progressive Agreement for Trans- Pacific Partnership have allowed the European Union, New Zealand and Australia to position themselves to seize sales from the U.S. dairy industry. Swift negotiation of a trade deal with Japan that builds upon the best components of the Japan-EU agreement and the CPTPP is urgently necessary for America’s dairy farmers and processors.”
With one month left until the 2019 sign-up for the Dairy Margin Coverage program closes, National Milk, this week, urged dairy farmers to enroll in the program, which guarantees a payout for cash-strapped producers in 2019.
The DMC is guaranteed to pay producers enrolled at the maximum $9.50 per hundredweight coverage level for every month of production through June, with another payment predicted for July, according to USDA data and forecasts. Enrollment numbers indicate that 63% of dairy operations with an established DMC production history have enrolled so far for this year and represents nearly 17,000 producers nationally,” according to NMPF.
“Dairy farmers prefer to get their income from the market, but much-needed payments for the first half of this year provide welcome certainty for farmers,” said Jim Mulhern, NMPF President and CEO. “DMC offers better support for dairy farmers than its predecessor, the Margin Protection Program. It’s worthwhile for every farmer.”