Analysis Milk supply
Feed costs outweigh milk price in US
Milk supply in the United States in December was almost exactly the same as last year. The lead that was still visible last summer has disappeared like snow in the sun. The high feed costs seem to outweigh the increasing milk price.
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Milk production in the 24 largest states amounted to 8.167.384 tons in December, according to figures from the US Department of Agriculture (USDA). Compared to the same month a year earlier, this is an increase of 0,1%. In November the deficit was 0,2%. These small differences cannot be called an increase in production. That is something you would actually expect given the increase in milk prices.
When we zoom in on production per state, dairy states such as California, Texas and Wisconsin show growth rates. New York State recorded a minus, as did many small dairy states in the Midwest.
Feed costs are taking a hit
Also for 2022 attractive milk prices of well over €40. Yet an increase in production is not obvious, according to the National Milk Producers Federation. She reports that dairy farmers often choose to slaughter cows instead of continuing with milking. This is due to the high feed raw material prices, while slaughter prices are attractive. In addition, the availability of roughage is an issue in some states. The number of dairy cows fell by 8.000 last month compared to November and was 42.000 below the level of December 2020. The fact that milk production remained the same is due to higher production per cow. The US currently has approximately 8,88 million dairy cows.
Looking at all of 2021, the US produced 102,6 million tonnes. This amounts to an increase of 1,6% compared to 2020. This means that the upward trend that has been visible since 2017 has continued. A leveling off trend is expected this year, although the year will still be long.