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Economist says U.S. dairy producers should shift focus from butterfat

A recent report shows U.S. dairy producers have excelled at producing butterfat and should consider shifting their focus to producing more protein instead.

Economist Corey Geiger with CoBank tells Brownfield of the top three dairy exporters, the U.S. has grown its production of milk components significantly without a big jump in milk production.  “The U.S. has grown butterfat percent 13% where the next biggest growth category has been closer to 2% for New Zealand and the E.U. (European Union).  Protein growth, the U.S. has led the world in that as well at about 6% up.”

Geiger says butterfat production grew by leaps and bounds, and farmers have had incentives to make that happen, but he says the demand is about to change the focus of production.  “Eight of the last ten years, butterfat led milk checks.  It was higher than protein.  We are, this fall, going to see a reversal of that.  Protein will take over the pole position on milk checks because we need more of it.”

Geiger says farmers have many tools to increase butterfat including nutrition and genetics.  He says having a more than 5% increase in butterfat production in June, July, and August created a supply and demand issue, dropping butter prices.  “Right now, we’ve got just a little bit too much extra supply of butterfat and it’s caused spot butter markets to drop almost seventy cents since August 1.”

Geiger recommends farmers discuss possible ration adjustments with their herd nutritionist to aim for more protein and perhaps less butterfat in their milk.

The full report can be found online at CoBank’s website.

AUDIO: Dairy Economist Corey Geiger from CoBank discusses butterfat and protein production, and why he expects the production focus to change with Brownfield’s Larry Lee