Continued gains in milk per cow nudged February milk production slightly above February 2018. Preliminary U.S. Department of Agriculture data in the top 23 producing states shows output at 16 billion pounds, up 0.6 percent from 2018, but that compares to a 1.3 gain in January. Output in the 50-state total was at 17 billion pounds, up just 0.2 percent. Revisions reduced the initial 23-state January estimate by 7 million pounds, putting it at 17.5 billion pounds, up 1.3 percent from 2018.

February cow numbers in the 50 states totaled 9.36 million head, unchanged from January but down 77,000 from a year ago, the eighth time that cow numbers were below a year ago since May 2016. Output per cow averaged 1,818 pounds, up 19 pounds from February 2018 and the 40th consecutive month of gain.

California milk output was up just 0.1 percent from a year ago, thanks to a 10-pound gain per cow outweighing 8,000 fewer cows. Wisconsin was up 1.5 percent on a 35-pound gain per cow, but cow numbers were down 5,000 head.

Idaho was up 2.1 percent, thanks to 8,000 more cows and a 15-pound gain per cow. New York was up 2.8 percent on a 45-pound gain per cow and 2,000 more cows. Pennsylvania was down for the 12th consecutive month, dropping 6 percent on 25,000 fewer cows and 20 pounds less per cow. Minnesota was up 1.6 percent on a 45-pound gain per cow offsetting 5,000 fewer cows.

Michigan was up 1 percent on a 35-pound gain per cow offsetting 3,000 fewer cows. New Mexico was down 3.9 percent on a 5-pound drop per cow and 12,000 fewer cows milked. Texas posted a 7.7 percent gain on the books, thanks to 70 pounds more per cow and 20,000 more cows milked.

Vermont was up 1 percent on a 40-pound per cow increase offsetting 2,000 fewer cows milked. Florida was down 6.2 percent on 8,000 fewer cows, though output per cow was up 5 pounds. Washington State was unchanged despite a 20-pound drop per cow; uncharacteristically bitter cold weather and winds took a huge toll on dairies. Cow numbers were down 3,000 from a year ago.

HighGround Dairy points out that “fields across the Midwest have been going through their own spring flush as the snowmelt has been making its way toward all of the rivers and waterways. While it is still too early to know what kind of an effect this may have on production, it could disrupt logistics in the near term, causing for some basis movements.”

Will we see U.S. output fall below year-ago levels? HGD’s Lucas Fuess is doubtful. Speaking in the March 25 Dairy Radio Now broadcast, he said that even the cow herd remains below year-ago levels, milk per cow continues to climb, and it looks like production will eke out gains through this spring even though it may not be at the strong levels that we’re used to.

It’s been over three years that we have seen a deficit to the previous year, according to Fuess, but output per cow continues to rise as farmers implement technology, genetic improvements, nutrition, anything possible to squeeze out more milk, even if the farmers themselves are being squeezed by tight margins.

Milk prices will depend on cheese prices holding through the spring flush, though butter seems pretty range-bound, he said. The wildcard will be nonfat dry milk, which HGD is “fairly bullish on.” Trade also is a big factor, and existing tariffs are blunting the export market, particularly to Mexico and China, he concluded, and HGD hopes for some kind of tariff resolution, especially with Mexico.

Dairy margins deteriorated slightly since the end of February as lower milk prices more than offset the impact from cheaper feed costs, according to the latest Margin Watch from Chicago-based Commodity and Ingredient Hedging LLC.

The MW detailed the February milk production report and warned that “recent harsh winter weather throughout much of the Western states and Upper Midwest may lead to lower milk production per cow in upcoming monthly reports, as a rare bomb cyclone has produced extensive flooding.

“The EU-28 reported January milk production of 12.9 billion metric tons which would be down 1.25 percent from a year ago as The Netherlands, Germany and France led declines throughout the region. The lower production also led to reduced skim milk powder output, with January production of 287.9 million pounds down 7.6 percent from December and 8.7 percent below a year ago.

“Feed markets, meanwhile, have been declining, with weakness in both corn and soybean meal as commodity funds build a record short position in the grain markets ahead of spring planting. This comes despite the fact that widespread flooding in the Western Corn Belt from the recent bomb cyclone will likely delay spring planting across the region,” the MW concludes.

U.S. fluid milk sales continue to slide, but the latest slippage was below 1 percent. Agriculture Department data puts January sales at 4.2 billion pounds, down just 0.6 percent from January 2018 following a 2.1 percent drop in December.

Conventional product sales totaled 3.97 billion pounds, down 0.5 percent from a year ago. Organic products, at 233 million pounds, were down 1.3 percent and represented about 5.5 percent of total sales for the month.

Whole milk sales totaled 1.35 billion pounds, up 2.6 percent from a year ago and making up 32.1 percent of total fluid sales in the month. Skim milk sales, at 312 million pounds, were down 9.2 percent and made up just 7.4 percent of total milk sales for the month.

The figures represent consumption of fluid milk products in federal milk order marketing areas and California, which account for about 92 percent of total fluid milk sales in the U.S.

DMN reports that the Federal Milk Order 1 (Northeast) annual fluid milk sales reached 7.9 billion pounds in 2018. Federal Order 32 (Central) annual fluid milk sales recorded was 4 billion pounds. Federal Order 51 (California) annual sales were 5.1 billion pounds, and all orders combined totaled 43.3 billion pounds.

The December 2018 “Hoard’s Dairyman” reported that fluid consumption per person has dropped 10 pounds, or 6 percent, in the past four years, and per-capita consumption was down 16 percent in the last eight years — a total of almost 30 pounds per person. Plant-based beverage competition has surely exacerbated this decline.

Speaking of fluid milk, the Agriculture Department announced the April federal order Class I base milk price at $15.76 per hundredweight, down 22 cents from March but $1.66 above April 2018. That equates to about $1.36 per gallon, up from $1.21 a year ago. The four-month Class I average is at $15.54, up from $14.29 at this time a year ago and compared to $16.78 in 2017.