By Lee Mielke

 U.S. milk output is stalling as cow numbers and output per cow continue to fall. Production fell below that of a year ago for the first time since May 2020, the result of restrictions imposed by several cooperatives. The USDA’s latest preliminary data shows October output at 18.52 billion pounds, down 0.5 percent from October 2020. The 24-state total, at 17.7 billion, was down 0.3 percent from a year ago. Revisions lowered the September 50-state estimate by 37 million pounds from last month’s report to 18.0 billion, virtually unchanged from 2020.

Cow numbers totaled 9.40 million head, down 14,000 from September, fifth consecutive month they were down from the previous month, and the September head count was revised 8,000 head lower. The October herd was 14,000 head below a year ago and down a whopping 103,000 since June.

StoneX Dairy Group said, “The only time we’ve seen that in the past 23 years was late 2009 when we lost 178,000 head over five months with the help of CWT and truly devastating margins.”

Output per cow averaged 1,970 pounds, down 6 pounds or 0.3 percent from a year ago.

California was down 43 million pounds or 1.3 percent from a year ago, on a 25-pound drop per cow. Cow numbers were unchanged. Wisconsin was up 69 million pounds or 2.7 percent, on a 20-pound gain per cow and 21,000 more cows. Idaho was up 0.9 percent, on 6,000 more cows. Output per cow was unchanged.

Michigan was off 0.4 percent on a 30-pound drop per cow, though cow numbers were up 4,000. Minnesota was up 2.8 percent on 9,000 more cows and a 15-pound gain per cow. New Mexico again had the biggest drop, down 12.2 percent, after falling 12.5 percent in September. Depleted finances shuttered several operations in the state. Cow numbers were down 34,000 head and output per cow was down 45 pounds.

New York was up 1 percent, thanks to 2,000 more cows and a 15-pound gain per cow. Oregon was unchanged across the board. Pennsylvania was down 3.1 percent, on 7,000 fewer cows and 30 pounds less per cow.

The Daily Dairy Report said an increase in cows in Texas was likely due producer purchases of cows and production bases from shuttered dairies in New Mexico.

The DDR added that a similar phenomenon has been happening in Idaho as an exodus of dairies occurs in Washington State, which scored the second biggest decline in October, down 6.9 percent, following a 6.8 percent drop in September. Cow numbers were down 15,000 and output per cow was down 30 pounds.

Farm profit margins have been taking a beating, especially between August and October, according to StoneX, “as longer-term feed contracts expired and many producers went from $180 per ton corn contracts to $275-$300 per ton. They culled animals because of it and we’re losing animals at a near record clip,” said StoneX, though some of it may be attributed to poorer feed or poorer weather.

The USDA’s latest Livestock, Dairy, and Poultry Outlook projects the U.S. dairy herd will continue decreasing in the first two quarters of 2022. Consequently, the annual 2022 forecast was lowered to 9.395 million head, 55,000 head below the last month’s forecast, and 60,000 less than 2021.

The 2022 forecast for milk per cow is 24,280 pounds, 25 pounds lower than last month’s forecast. The 2022 milk production estimate was lowered to 228.1 billion pounds, 1.6 billion below last month’s forecast but 1.7 billion pounds above 2021.

In the week ending Nov. 6, 59,900 dairy cows were sent to slaughter, up 300 from the previous week and 2,100 head or 3.6 percent above that week a year ago.

There is still plenty of milk available in this country and commercial dairy product disappearance slipped a little in September. USDA’s latest data shows total cheese disappearance at 1.15 billion pounds, down 0.3 percent from September 2020, though year to date is up 3.9 percent. Exports were up 20.5 percent. Butter totaled 186.6 million pounds, down 0.4 percent, with YTD up 5.2 percent, and exports up 111.5 percent.

Exports were a key topic at this week’s joint annual meeting of the National Milk Producers Federation (NMPF), United Dairy Industry Association, and Dairy Management Incorporated (DMI) in Las Vegas.

Hoards Dairyman’s Corey Geiger said NMPF’s Jim Mulhern said the United States is on track for a record year in exports, meaning we will export about 17 percent of our milk solids or all of the country’s milk output for five days per month from 9 million cows. He said 75 percent of the new milk we produced is in effect being exported.

The USDEC’s Krysta Harden said no one is going to give us market share, we have to go out and get it, according to Geiger. Mexico is our biggest market, he said, but DMI’s Barbara O’Brien pointed out that the 16 countries of Southeast Asia, not including China, have a growing middle class that wants dairy products.

The Agriculture Department announced the December Federal order Class I base milk price at $19.17 per hundredweight, up $1.19 from November, 70 cents below December 2020, and the highest Class I since December 2020. It equates to about $1.65 per gallon, down from $1.71 a year ago. The 2021 Class I average is $16.83, down from $16.91 in 2020, and compares to $16.99 in 2019.

U.S. fluid sales remain below a year ago. September sales of packaged fluid products totaled 3.7 billion pounds, down 1.3 percent from September 2020. Conventional product sales, at 3.4 billion pounds, were down 1.1 percent from a year ago. Organic products, at 227 million pounds, were down 4.1 percent, and represented 6.2 percent of total sales for the month.

Whole milk sales totaled 1.2 billion pounds, down 3.4 percent from a year ago, with year-to-date consumption down 6.6 percent. Whole milk represented 33.2 percent of total milk sales for the nine-month period. Skim milk sales, at 203 million pounds, were down 9.8 percent from a year ago, and down 13.2 percent year to date.

Total packaged fluid milk sales for the nine months amounted to 32.9 billion pounds, down 4.5 percent from 2020. Conventional product sales totaled 30.8 billion pounds, down 4.6 percent. Organic products, at 2.1 billion, were down 2.3 percent, and represented 6.4 percent of total milk sales for the period.

The figures represent consumption in Federal milk marketing order areas, which account for approximately 92 percent of total fluid milk sales in the country.

U.S. per capita consumption of fluid cow’s milk has been decreasing for more than 70 years, according to the USDA’s Economic Research Service (ERS). During the previous decade, it fell at a faster rate than it did during each of the previous six decades. ERS data show that the average rate of decrease was 1 percent per year over the 2000s. During the 2010s, it was 2.6 percent per year.

About 90 percent of the U.S. population does not consume enough dairy products to meet federal dietary recommendations, and declining per capita consumption of fluid cow’s milk prevents these individuals from consuming a diet more line in with those recommendations, according to ERS.