US milk production drops but remains high

This means growth continues, albeit at a slower pace than the 4,6% growth recorded in December. This is likely due to the extreme cold in January, which depressed production. 

Production is driven by both more cows and higher yields per animal. The number of dairy cows increased by 2,2% to 9,15 million, while milk production per cow rose by 1,2%. Strong growth was seen particularly in California (+4,7%), Texas (+7,6%), and Kansas (+26,1%). In states like Washington (-6,1%) and Pennsylvania (-3%), production actually declined.

Few heifers
It's striking that growth is increasingly dependent on herd expansion and less on higher productivity per cow. This raises questions about the long-term sustainability of production expansion. According to figures from the United States Department of Agriculture (USDA), the number of replacement heifers decreased by 0,27% to 3,9 million animals as of January 1, the lowest level in two decades. 

This means dairy farmers are keeping cows in production longer to maintain growth. In the short term, this supports supply, but in the long run, it could reduce milk supply. 

Milk price under heavy pressure
At the same time, milk prices are under pressure. The average US milk price in December was $19 per hundredweight (45,3 kilograms), a decline of more than 18% compared to a year earlier. Prices fell in all 24 states.

The combination of high production and lower prices is putting pressure on margins and limiting the incentive to expand further. Furthermore, consolidation in the sector continues. The number of registered dairy farms fell by approximately 4% last year.