By Lee Mielke

Milk production in the USA was below a year ago for the fourth month in a row in February. That was expected but no need to worry about a milk shortage like consumers were over toilet paper not so long ago.

The USDA’s preliminary data shows output at 17.5 billion pounds, down 1.0 percent from February 2021, and follows the 1.7 percent drop in January. Output in the top 24 producing states totaled 16.7 billion pounds, down 0.7 percent. Revisions lowered the original 50-state January estimate by 20 million pounds to 19.0 billion, 1.7 percent below that of a year ago.

February cow numbers totaled 9.37 million, up 3,000 from January, first increase in eight months, but were down 96,000 from a year ago. The January count was revised 1,000 head lower.

Output per cow averaged 1,869 pounds, up 1 pound from 2021. January output per cow was revised down 2 pounds to 2,032 pounds.

California production totaled 3.3 billion pounds, down 6 million pounds or 0.2 percent from a year ago, thanks to a 5 pound drop per cow. Cow numbers were up 1,000. Wisconsin output totaled 2.4 billion pounds, up 17 million or 0.7 percent. Cow numbers were up 9,000 and output per cow was unchanged from a year ago.

Hopefully, the milk supply remains in check and supports prices. Rising feed and fuel prices will likely act as a governor to milk output however rising fuel and food prices for families could threaten dairy product demand.

Global milk output is not rising either. StoneX March 21 Early Morning Update pointed out that February New Zealand milk output was down 7.2 percent from last year. The forecast for the full season is down 4.4 percent, “but there’s still room for it to come in lower than forecast, according to StoneX.

Meanwhile, China’s latest import data from January and February showed that “Combined volumes were down against the record start to 2021,” said HighGround Dairy, “as weaker demand needs for whey, lower availability of skim milk powder and other finished goods counterbalance the strong import volumes for whole milk powder.”

Whole milk powder imports were up in both January and February, according to HGD’s Lucas Fuess in the March 28 Dairy Radio Now broadcast. They totaled 157.1 million pounds in February, up 40.3 percent from February 2021, as the country looked anywhere it could around the globe for product, while skim milk powder totaled just 62.4 million pounds, up only 5.2 percent. Fuess blamed the lack of product availability rather than a downturn in Chinese demand for skim milk powder.

The largest drop was in the whey category, according to HGD, with extensive losses to the U.S. and Europe. February imports were the weakest since June 2019, but Fuess said the recovery in China’s hog herd from African Swine Fever likely led to the decrease in whey needs.

Milk availability is tight in New Zealand, Fuess concluded, a major supplier of dairy to China, which had caused them to look to other sources such as Australia, the EU, and the U.S.

Fat imports were solid with the bulk of the volume from New Zealand, said HGD. “Demand for butter and anhydrous milkfat in recent months has been observed on Global Dairy Trade events as the North Asia region increased fat purchases in 2022. The countries seeing the largest drops were Poland and the U.S.

China, for the past few years, has released its January and February data together in March as retaliation of former President Donald Trump’s tariffs.

Faced with balancing what would be considered profitable milk prices against profit robbing feed and fuel prices, U.S. dairy farmers keep weeding out less profitable cows. Culling was up slightly from January and a tad above a year ago.

USDA’s latest Livestock Slaughter report shows an estimated 266,500 head were sent to slaughter under federal inspection in February, up 5,700 from January, but 1,300 head or 0.5 percent below February 2021.

Checking the cupboards, U.S. butter stocks continued to build in February but remained well below a year ago. The USDA’s latest Cold Storage report shows the February 28 inventory at 263.0 million pounds, up a hefty 43.6 million pounds or 19.9 percent from the January level, which was revised down 1.9 million pounds. Stocks were a whopping 91.6 million pounds or 25.8 percent below a year ago however, the fifth consecutive month to fall short of the previous year.

The March 18 Dairy and Food Market Analyst said the numbers of ships waiting to be unloaded at West Coast ports is near the lowest level in several months. The average wait time for ships to berth has shrunk to just 11 days after peaking at more than two weeks during December.

The port congestion prompted action by lawmakers and one such move was passage by the Senate Commerce Committee of the Ocean Shipping Reform Act (OSRA). The legislation garnered praise from the National Milk Producers Federation and the U.S. Dairy Export Council, stating in a joint press release that “The approval establishes Senate committee support for action to address shipping supply chain challenges as Congress prepares to commence conference procedures on the Senate-passed U.S. Innovation & Competition Act and the House-passed America Creating Opportunities for Manufacturing, Pre-Eminence in Technology, and Economic Strength (COMPETES) Act. The House COMPETES Act includes the House-passed version of OSRA.”

Jim Mulhern, of NMPF, said, “Today’s action by the Senate Commerce Committee brings the Ocean Shipping Reform Act one step closer to passage. Export supply chain issues continue to pose immense challenges to dairy exporters, which is why this legislation remains so critical as part of a broad-based approach to tackling those problems.” The measure also got a thumbs up from the International Dairy Foods Association. Next step is a vote by the full Senate.

The IDFA gave a thumbs down however to the Food and Drug Administration’s response to its objections and request for a hearing on the final rule to amend and modernize the standard of identity for yogurt released in June 2021.

IDFA President Michael Dykes stated, “Yogurt makers have been waiting 40 years for the FDA to update and modernize the yogurt standard of identity. Today, the FDA issued a notice telling us to keep waiting and threw in a whole lot of uncertainty, to boot.

“Last July, IDFA forcefully objected to the FDA’s final rule to amend and modernize the standard of identity for yogurt released in June. In December. IDFA sent a letter to Dr. Woodcock, Acting Commissioner for FDA, reiterating our request for a hearing with FDA to resolve the industry’s objections, along with providing manufacturers sufficient time for compliance. Today, after eight months of waiting, FDA issued a notice staying certain provisions of the yogurt standard of identity final rule. IDFA was able to leverage unique formal rulemaking procedures available to the dairy industry to object and, ultimately, prompt a stay of certain provisions that are detrimental to our industry. Without this lever, an impractical final rule would have gone into effect, damaging yogurt makers, throwing retail establishments into confusion, and limiting choice for consumers.”