August 25, 2023

Challenging conditions in US southwest and California state lead to decrease in US milk production

The July 2023 US Department of Agriculture (USDA) Milk Production report has shed light on challenging circumstances in the country's southwest region and California state, revealing a 0.6% year-over-year decline in milk production, totalling 18.3 billion lbs, the first year-over-year decrease since June 2022, Dairy Herd Management reported.

Correspondingly, cattle numbers have also diminished by 13,000 compared to the previous year, reflecting a drop of 3,000 head from the previous month.

According to Phil Plourd, president of Ever.Ag Insights, the US states of Texas and New Mexico experienced a setback in milk output. Unfavourable weather conditions, particularly in the Texas panhandle, coupled with economic struggles and the tragic explosion in April that claimed the lives of 18,000 cows in Texas, have collectively contributed to the decline in production.

California's milk production witnessed a significant dip of 194 million lbs., representing a decrease of 5.5% alongside 7,000 fewer cows. Texas and New Mexico reported declines of over 50 million lbs. Texas's reduction of 60 million lbs. was largely attributed to a major barn fire earlier this year. New Mexico faced a decline of 54 million lbs., coinciding with a decrease of 17,000 cows.

Plourd said California faced a period of hot weather and is also contending with low margins that are impacting cow numbers, adding that Ever.Ag Insights is comparing the current figures with a strong performance in July 2022 (+2.4%).

Amidst these challenges, there were positive trends in certain regions. New York witnessed an addition of 50 million lbs. alongside 7,000 more cattle, while Michigan reported a surge of 41 million lbs. accompanied by an increase of 13,000 cattle. Several other states also experienced favourable gains, including: Idaho (29 million lbs., +13,000 cattle); South Dakota (27 million lbs., +14,000 cattle); and Wisconsin (25 million lbs., -3,000 cattle).

Ploud said producers in the Upper Midwest weren't thriving, but the financial issues there have been unfolding at a slower pace, and the weather conditions in July were relatively favourable.

He also said that the critical question moving forward is determining the extent to which July's overall weakness was a result of structural factors as opposed to seasonal influences.

-      Dairy Herd Management