April 18, 2008

 

US milk production to surge on favourable returns

 

 

The US milk herd size is projected to increase slightly in 2008 at 190 billion pounds as output per cow climbs less than 1 percent on a per day basis in 2007.

 

Milk production in the US is expected to withstand feed price pressures as herds continue to expand due to favorable returns.

 

Milk prices have been declining while the demand for dairy products remains relatively strong.

 

Commercial use for this year was forecast to exceed that of 2007 in each of the four quarters and average 3 percent above 2007.

 

The demand in the domestic market was also seen steady as consumers adjusted to substantially higher prices in 2007.

 

Cheese and butter prices are expected to be higher in 2008.

 

Furthermore, exports also boost the demand. In recent years, cheese and butter are being exported in larger quantities.

 

In Q4 of 2007, butter exports ranged at between 14 and 16 percent of total production.

 

February butter and butter product exports also exceed 11 percent of production.

 

Likewise, cheese exports in 2007 have exceeded those of recent years and reached nearly 3 percent of total production in January 2008.

 

These higher export trends are expected to continue in 2008.

 

While the EU has increased milk production quotas by 2 percent in April 2008, most of any increased production was seen to be directed to internal demand.

 

Meanwhile, Australia appears to be recovering from drought, yet production this season is still expected to be below last year.