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Milk output rises 1.7 percent in February; livestock culling down

 

By LEE MIELKE
Mielke Market Weekly 

U.S. milk production topped that of a year ago for the 14th consecutive month, according to preliminary data in USDA’s February Milk Production report. The USDA estimates output in the top 23 producing states at 15.1 billion pounds, up 1.7 percent from February 2014. The 50-state total, at 16.2 billion pounds, was also up 1.7 percent from a year ago. Revisions raised the original January 23-state estimate by 17 million pounds, now reported at 16.5 billion pounds, up 2.2 percent from a year ago.

February cow numbers in the 23 states, at 8.62 million head, were up 2,000 head from January and 106,000 more than a year ago. The 50-state count, at 9.3 million head, is up 3,000 from January and 100,000 more than a year ago.

February output per cow in the 23 states averaged 1,757 pounds, up 8 pounds from February 2014, and the highest production per cow for the month of February since the 23-state series began in 2003.

Continued increasing cow numbers and higher output per cow fueled the gains in February and offset California’s 3.8 percent decline, which resulted from a drop of 2,000 cows from a year ago and output per cow being down 70 pounds. Wisconsin poured it on in February, up 4.3 percent, thanks to a 65 pound gain per cow and 6,000 more cows. New York posted a 2.3 percent increase on 35 pounds more per cow and 1,000 more cows. Idaho was up 1.5 percent on 13,000 more cows, but output per cow was down 15 pounds. Pennsylvania was up 2.0 percent on a 35 pound per cow gain, but cow numbers were down 1,000. Minnesota was up a healthy 4.3 percent on a 65 pound gain per cow, though cow numbers were unchanged.

The biggest gain was in South Dakota, up 9.6 percent on a 50 pound gain per cow and 6,000 more cows. Michigan was next, up 7.8 percent, thanks to 22,000 more cows and 35 pounds more per cow. Colorado followed closely behind, up 7.6 percent on a 75 pound gain per cow and 5,000 more cows, followed by Utah up 6.9 percent. Again, only two states showed declines, California and New Mexico, where a 70 pound drop per cow put less milk in the tank even though cow numbers were unchanged.

Arizona was up 2.9 percent on a 25 pound gain per cow and 3,000 more cows. Texas was up 4.2 percent despite a 15 pound drop per cow, but cow numbers were up 23,000 head. Washington State was up 2.4 percent, thanks to 8,000 more cows, but output per cow was down 10 pounds.

Dairy cow culling was down in February, according to USDA’s latest Livestock Slaughter report. The data show an estimated 242,000 dairy cows were slaughtered under Federal inspection in the month, down 33,000 head from January but 5,000 head more than February 2014.

Looking at the first two months of 2015, 518,000 dairy cows took retirement from the dairy business, up 11,000 head from the same time a year ago. The heaviest culling occurred in the West, which included Arizona, California, Idaho, Oregon, and Washington, followed by the Midwest (Wisconsin, Minnesota, Michigan, Indiana) and the East (Pennsylvania and the Virginias).

As it always does, USDA’s monthly Livestock, Dairy, and Poultry Outlook, issued March 16, mirrored dairy projections contained in the March 10 World Agricultural Supply and Demand Estimates report. The Outlook shows milk production for 2015 forecast at 211.1 billion pounds, 2.5 percent higher than the 2014 level of 206.0 billion pounds, but 400 million pounds less than forecast last month.

In January, U.S. milk production was 17.6 billion pounds, 2.1 percent higher than in January 2014. This growth was substantially lower than the December year-over year growth rate of 3.4 percent and much lower than the peak growth rate of 4.3 percent in September. Slower milk production growth was the result of slower year-over-year growth in output per cow, which fell from 2.3 percent in December to 1.0 percent in January. The year-over-year growth rate in milk cow numbers was 1.0 percent in both December and January.

Contributing factors for lower yields include declining milk prices relative to feed prices and the ongoing drought in California and other Western areas of the U.S. Although feed prices have generally declined since the second quarter of 2014, milk prices have declined proportionally more since September, resulting in a decrease in the milk-feed ratio from 2.97 in September to 2.09 in January.

Prices

Mid-March dairy prices are heading lower. The block Cheddar closed March 20 at $1.54 per pound, down 3 cents on the week and a whopping 88.75 cents below a year ago when they reached the second highest peak of 2014, $2.4275. You recall they peaked at a record $2.45 in mid September. The barrel Cheddar closed Friday at $1.52, down 2.5 cents on the week and 79 cents below a year ago. Fourteen cars of block were sold on the week and one of barrel. The NDPSR-surveyed U.S. average block price hit $1.5640 per pound, up 0.6 cent, and the barrels averaged $1.5345, up a half cent.

Cash butter finished at $1.68, down 1.5 cents on the week and 24 cents below a year ago. Three cars were sold on the week, and NDPSR butter averaged $1.7190, up 3.8 cents.

Cash Grade A nonfat dry milk continued its decline, closing the week at 97.5 cents per pound, down 1.75 cents on the week and the lowest spot price since Jan. 22, 2015. Only seven cars were sold last week at the CME. NDPSR powder averaged $1.0724 per pound, up 2.8 cents, and dry whey averaged 48.35 cents per pound, down 2.1 cents.

3/25/2015