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Low milk production not likely to flip soon

A dairy economist says U.S. milk production was way below expectations along with New Zealand numbers for January.

“The supply situation just keeps getting worse.”

Nate Donnay with StoneX says the real breakdown of milk production in the U.S. came in the form of milk per cow.

“January was down 42 pounds, that’s a record deviation from trend,” he says.

While some analysts speculate reduced production is tied to feed quality or a lack of feed ingredients over the winter, Donnay expects USDA is off.  Following indications from dairy cattle slaughter numbers, he says milk production overall is likely to improve, but it will take a while to rebuild the herd.

“It feels like milk has been more available here in February but given how far the herd has dropped in the past six months, it’s going to take quite a while to rebuild,” he explains.

Milk production in New Zealand in January was also projected lower which Donnay says will likely lead to higher Global Dairy Trade auction numbers at the next event.

Donnay shared his thoughts on the latest dairy reports during his weekly outlook forecast.