October 22, 2018

Milk Production Keeps Climbing While Cow Numbers Fall

 |  By: Know Your Market

The biggest news on Friday was the USDA’s release of the September milk production report. Year-over-year production in the month of September rose 1.3% over 2017 numbers, and that came entirely from growth in production per cow. 


Cow numbers were a different story. Major revisions were made to three of the previous USDA milk production reports and in the end, the revised August figure was left 21,000 cows short of what was reported last month. That leaves us with the September number, it comes in 12,000 lower than the revised August number to that final 9.367 million head figure, fully 37,000 head less than the May figure. 


These adjustments take a large step forward in correcting potential future milk supply. However, with the growth of 1.3% in milk production year-over-year, the question lies in how well our advancing efficiency in production for cow growth can keep up with the obvious growth and slaughter.


A quick run through the CME spot trade saw butter prices rise a penny to $2.26 with Grade A nonfat dry milk rising a half cent to 87 and a quarter. Barrel cheese also rose, this time a quarter cent to finish at $1.26 and three-quarters, narrowing the gap between it and blocks to 23 cents after blocks fell 2 and a quarter cent to finish at $1.49 and three-quarters. Dry whey remained unchanged at 57 and a half cents. 


Class III markets remained unchanged through the balance of the year and stand $15.53at while the first half of 2019 rose a penny, too $15.74. The Class IV averages for those same two periods rose 5 and 11 cents, respectively.