Triumph in dairy farming America

Due to the end of the milk quota, the growth of the European milk pool could count on a healthy amount of attention. It is completely different for the American milk lake. Almost silently, American livestock farmers have started a growth spurt. Perhaps it is because dairy consumption in the US is also picking up somewhat. However, they cannot sell all the extra liters on the domestic market either. Especially now that growth continues, the importance of exports is increasing.

Highest point since 2003
Nevertheless, the 23 most important milk-producing states in the US reached the highest point since 2003 in March. Never before have processors collected 7,95 million tons of milk. That is an increase of 1,8 percent compared to March 2016. In the entire US, milk receipts amount to 8,49 million tons of milk. Still well below the volume produced within the European Union. Yet the gap is slowly starting to narrow again.

On the one hand, the higher milk receipt is due to further growth of the dairy herd. In the US as a whole, there were 9,38 million animals in March. A plus of 15.000 pieces compared to a month earlier. Not only are there more cows, they also produce more milk on average. To be precise, the animals never produced so much milk in March. 

Recovery after Goliath
The states that stand out are California, New York and Texas. All three are among the larger, if not largest, producers of milk. The Golden State stands out because the milk supply there is still behind by 3 percent compared to one year earlier. Number 2,9, Wisconsin, on the other hand, recorded a growth of 3 percent.

Another region that continues to perform in milk supply is New York. The state shows a plus of 3,6 percent. But then Texas. This state has completely recovered from the damage Goliath, one year earlier, and achieved a plus of 16,4 percent. Together, the states mentioned are responsible for 45 percent of the milk supply in the United States.  

A taste of what's to come
Traditionally, the American states, like the EU, reach their highest point in milk supply in May. The March results already give a taste of what is to come. Not taking the leap year into account, the total milk supply, up to and including March, has a lead of 1 percent.

The extra milk also increases the need for American farmers to export. That went significantly less well in 2016, for example due to high prices for butter and cheese. At the beginning of April, the butter price is again in line with that of the EU and Oceania. The US is even very competitive in the field of milk powder. This means that pricing is only a minor hurdle.

Only the president. Trade agreements are vital to exporting. Concerns about this are increasing, because this is apparently the last item on Trump's agenda. Although the ambitions of USDEC, the American dairy export organization, are great, they cannot completely ignore the president.

Triumph or a blow to the bone?
Due to this confluence of developments, the question remains whether the growth in the milk pool is a triumph or whether it will ultimately become a hindrance. The growth in milk production suggests that things are going well in this sector, but reports are still coming from various states where dairy farmers are having difficulty making ends meet.

And the EU? It is also increasingly relying on the export market for dairy. This market still offers opportunities in terms of size, but a lot of work still needs to be done from this angle. It helps if a competitor, such as the US, is less vocal. The US is still the EU's most important buyer of cheese, as Russia has been closed to this product for several years. Which underlines that the EU at the same time has an interest in maintaining a good relationship with Trump.     

More information about milk supply worldwide