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Saturday, December 16, 2017
 Milk Production Growth Continues  

U.S. milk production climbed 2.7 percent in November as rising prices earlier this year spurred dairy farmers to increase herds and boost per-cow output, according to the US Department of Agriculture.

According to USDA, production climbed to 15.47 billion pounds (7.2 billion kilograms) from 15.07 billion in November 2009. The dairy herd rose 0.3 percent to 9.121 million head from a year earlier, while the average cow produced 1,696 pounds of milk during the month, up 2.3 percent.

“Cows numbers are up,” said Jerry Dryer, an industry consultant and the editor of the newsletter Dairy & Food Market Analyst in Delray Beach, Florida. “Rising feed costs have producers focused on producing more milk per cow,” said Dryer, adding that productivity growth is slowing. Dryer forecast a 2.4 percent increase in output.

Class III milk futures reached a two-year high at $16.67 per 100 pounds on October 1st as domestic dairy-product demand rose and exports of butter and powdered milk increased.  Nonfat dry milk prices have remained firm in the range of $1.20 to $1.23 per pound in the West which has held up the Class IV price. But, with lower butter prices the Class IV price peaked at $17.15 in October, declined to $16.68 in November and will be about $15.15 for December. The Class IV price may fall below $15.00 early in 2011, but recover and remain above $15.00 for most of 2011. This means the advanced Class IV price will likely be the mover of Class I prices most months during 2011.

Rising Exports
Dairy product prices and milk prices would have fallen even more if it had not been for strong exports.  USDA data also show that U.S. dairy-product exports rose 40 percent to 1.325 million metric tons during the first 10 months of 2010 from a year earlier.

Record exports of nonfat dry milk/skim milk powder were posted in October, up 69% from a year ago. Year to date exports were up 48%. October cheese exports were up 63% and year to date up 62%. October butterfat exports were up 11%, but up 168% year to date. Total whey protein exports during October were up 13% and year to date up 32%.

Rising demand from Asia has helped to boost U.S. exports, Dryer said. Shipments may increase after New Zealand, the world’s biggest dairy-product exporter, declared medium-level droughts in several areas, including Waikato, the biggest milk-producing region, he said.

Rabobank Groep NV said it expects “a significant shift in market fundamentals” that will boost U.S. exports again in 2011.

“After almost two years of uninterrupted growth, exportable supply is expected to fall below previous-year levels in early 2011,” because of New Zealand’s drought, Rabobank said in a report this week.

“Assuming a re-acceleration in the world economy, and strong ongoing purchases from the world market from China and Russia in particular, this is set to exert upward pressure on international dairy commodity prices in coming months,” Rabobank said.

Source: Bloomberg

http://www.bloomberg.com/news/2010-12-17/u-s-milk-output-rises-as-higher-prices-spur-herd-expansion.html
 


Posted on Wednesday, December 22, 2010 (Archive on Wednesday, December 29, 2010)
Posted by bsutton@adpi.org  Contributed by bsutton@adpi.org
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