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American milk supplies are again lower
Milk production in the United States recorded a decline in August for the second month in a row compared to last year. However, the decline is less significant than in July, according to figures from the American Department of Agriculture (USDA).
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In August, milk production recorded 8,23 million tons. This is a decrease of 0,3% compared to the same month last year. In July the decline was still 0,8%. In the preceding months there was growth, as has been usual in the US in recent years.
It is striking that dairy farmers in California are hitting the brakes, with a decline of almost 4%. The decline was also more than 3% in Texas. Other large dairy states such as Idaho and Wisconsin are seeing slight growth. Nationally, the declining milk supply can be attributed to a slight decrease in the number of dairy cows in combination with lower production per cow.
Margins under strong pressure
Due to the sharp drop in milk prices, the motivation to milk hard seems to be less. Margins among American dairy farmers are increasingly under pressure. The USDA projects that the average income of American dairy farmers will drop by 2023% by 81, wiping out $12 billion in value.
The federal Dairy Margin Coverage-program will pay out significantly more this year than last year. With this government insurance program, dairy farmers can, among other things, protect themselves against poor margins. The program is expected to pay out $904 million this year, up from $127 million last year.