By LEE MIELKE
Mielke Market Weekly 

U.S. milk production remained above year ago levels for the 12th consecutive month, according to preliminary data in the December Milk Production report released Friday, Jan. 23. The USDA estimates output in the top 23 producing states at 16.24 billion pounds, up 3.2 percent from December 2013. The 50-state total, at 17.3 billion pounds, was up 3.1 percent from a year ago. Revisions raised the original November 23-state estimate by 12 million pounds, now reported at 15.5 billion pounds, up 3.5 percent from a year ago.

December cow numbers in the 23 states, at 8.61 million head, were up 16,000 head from November and 107,000 more than a year ago. The 50-state count, at 9.3 million head, is up 22,000 from October and 100,000 more than a year ago.

December output per cow in the 23 states averaged 1,886 pounds, up 35 pounds from November 2013, and the highest production per cow for the month of December since the 23 State series began in 2003.

Continued increasing cow numbers and higher output per cow fueled the gains in December though California was off 0.1 percent on a drop of 1,000 cows from a year ago and unchanged output per cow. Wisconsin was up 3.1 percent, thanks to a 50 pound gain per cow and 4,000 more cows. Idaho was up 3.5 percent on 14,000 more cows and 20 pounds more per cow. New York posted a 4.1 percent increase on 70 pounds more per cow and 2,000 more cows. Pennsylvania was up 3.3 percent on a 55 pound per cow gain, but cow numbers were unchanged. Minnesota registered a 2.3 percent increase on a 40 pound gain per cow, but cow numbers were unchanged.

The biggest gain was in Texas, up 9.7 percent on 30,000 more cows milked and 50 pounds more per cow than a year ago. Utah was next, up 8.8 percent. Michigan posted a 7.8 percent increase, thanks to 22,000 more cows and a 40 pound per cow increase. Three states showed declines: Oregon, down 0.5 percent, Illinois, off 0.6 percent, and then California.

New Mexico was up a half-percent on a 10 pound per cow increase, but cow numbers were unchanged. Washington State was up 5 percent, thanks to 11,000 more cows and a 15 pound gain per cow.

Falling milk prices likely triggered heavier dairy cow culling in December and the head count was dead even (pardon the pun) with a year ago, according to data in USDA’s latest Livestock Slaughter report. The report shows an estimated 257,000 dairy cows were slaughtered under Federal inspection in the month, up 39,000 head from November and matched the head count of December 2013.

Looking at the full 12 months of 2014, USDA estimates that 2.82 million head of dairy cows ended their dairy career, 309,000 head less than 2013.

The second Global Dairy Trade (GDT) auction of the New Year saw the weighted average for all products inch up 1.0 percent, following the 3.6 percent jump on Jan. 6, but it is the third event in a row to see a positive move. However, unlike the last auction, not all of the products offered were up.

The uptick Jan. 6 was led by whole milk powder, up 3.8 percent, which was up 1.6 percent last time. Rennet Casein was next, up 3.3 percent, following a 4.2 percent jump last time. Skim milk powder was up 1.0 percent, following a 2.8 percent jump last time, and butter inched 0.1 percent higher, following a pole vault of 13.2 percent last time.

The biggest decline was in buttermilk powder, down 6.4 percent, following a 10.5 percent jump in the last event. Anhydrous milkfat was next, down 5.0 percent, following a 6.8 percent gain last time, and then came Cheddar cheese, down 4.3 percent, after jumping 3.2 percent last time. Sweet whey powder rounded up the bottom, down 4.1 percent. It was not offered in the last event.

FC Stone reports the average GDT butter price equated to about $1.6168 per pound U.S., up from $1.6141 per pound in the Jan. 6 event. Contrast that to CME butter, which closed Friday, Jan. 23, at $1.55 per pound. The GDT Cheddar cheese average was $1.3433 per pound U.S., down from $1.4015. The U.S. block Cheddar CME price closed Friday, Jan. 23, at $1.48 per pound. GDT skim milk powder, at $1.0837 per pound U.S., is up from $1.0821, and the whole milk powder average at $1.0896 per pound U.S., is up from $1.0464 in the last event. The CME Grade A nonfat dry milk price closed Friday at 98 1/4-cents per pound.

The USDA provided more specific information about the extent of coverage chosen by dairy farmers enrolled for 2015 in the new Margin Protection Program (MPP), including a state-by-state breakdown of the percentage of farms using the new safety net.

The USDA had announced that more than half of U.S. dairy operations have enrolled in the MPP. Friday, Jan. 23, USDA provided an estimate that 55 percent of those farms elected to pay additional premiums to purchase a higher level of coverage, above the basic, $4 per cwt. level offered for $100 per year.

National Milk’s (NMPF) President and CEO Jim Mulhern said the enrollment level represents "a vote of confidence in this new program and highlights the importance of the MPP at a time when farmers need protection as margins will be challenged because of adverse conditions."

The USDA clarified that 50.4 percent of the nation’s dairy farms have enrolled in the MPP. The percentage ranges from a low in Wyoming of 5 percent to a high in Nevada of 90 percent. The participation level in the 10 largest dairy states was 51 percent, almost identical to the national average.

A briefing paper on the MPP was issued by Dairy Market and Policy (DMaP), authored by six university economists. One of those economists, Dr. Andrew Novakovic, professor at Cornell University, talked about the findings on Friday’s DairyLine.