June 7, 2016

Milk Prices Expected to Rally Despite Record Production

 |  By: Know Your Market

By Dan Vaught, ProFarmer

Despite persistently weak milk and product prices, as well as an upward turn in grain prices and feed costs, U.S. dairy producers continued their recent herd expansion during April. After having trimmed herds rather sharply in January, when the national milking cow herd at 9.309 million head came in 11,000 below the ending-2015 total and just 1,000 over the comparable January 2015 result, producers have actively increased herd sizes. USDA's April estimate at 9.331 million topped the May 2015 peak by 7,000 head. The feed cost reductions experienced during the first quarter apparently offset the concurrent erosion in milk prices.

The relative abundance of moisture and good pasture around the country helped boost April milk production per cow 1.05% annually to 1,929 lbs. per cow, with U.S. output reaching 18.0 billion lbs. during the month of April. That represented a 1.2% annual increase, thereby marking the twenty-sixth consecutive year-to-year rise. It also represented the fourteenth straight monthly record.

The upward trend in the dairy population may continue through this month, since the U.S. milking cow herd traditionally reaches an annual high during the May-June period.

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