Inside Milk
Americans keep more dairy cows again
American dairy farmers are keeping more cows again. This can be seen that they have confidence in the future. The high milk prices give ...
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From early 2018 to mid-2019, the number of dairy cows in the United States showed a clear downward trend. During that period the number of dairy cows shrank hundred thousand pieces. This was mainly a result of many dairy farmers retiring. The number of dairy farmers retiring is probably a continuous trend, but since June the number of dairy cows has shown slight growth figures again. The number of cows has since grown by 20.000 to 9,33 million in December.
More cows, more milk
This increase is a signal that those staying there have confidence in the future. The milk price, which has risen sharply in recent months, gives reason for this. Last November the milk price (class 3) amounted to €40,80 per 100 kilos. This amounts to an increase of more than 40% in one year. In December and January the milk price dropped somewhat, as is seasonal practice in the US. However, the payout prices still invite further milking.
The higher animal numbers, in combination with an ever-increasing production per cow, leads to a growing milk supply. In December, supply in the 24 most important was 7,9 million tons, an increase of 0,9% compared to the same month in 2018 and also well above the long-term average. For the whole of 2019, milk production amounted to 99 million tons. This is a slight increase (+0,3%) compared to 2018.
Expectations 2020
The US Department of Agriculture (USDA) predicts a further increase in milk production for 2020. The increase is calculated at 1,7%. The USDA does not expect animal numbers to increase rapidly. Many dairy farmers must first eliminate the losses incurred between 2015 and 2019. The growing production is mainly a result of a higher milk yield per cow.
It is not expected that higher production will put pressure on the milk price. After all, the US recently signed phase 1 of the trade deal with China. A trade agreement with Japan is also in the making. Both Asian countries are important buyers of American dairy. It's closer to home too the trade agreement with neighboring countries Mexico and Canada almost complete. That will probably also have a positive effect on American dairy exports.