The August USDA Milk Production report showed an unexpected uptick in the herd, albeit by a nominal 2,000 head, enough to see milk volume up 1.5 percent YOY at 17.8 billion pounds. USDA also revised past statistics, lifting June by 59 million lbs, a 0.3 percent increase above what was previously reported.

With these changes, U.S. milk production for 2020 is up 1.75 percent YOY, and cow numbers are still up 37,000 YOY.

The small bump in herd and better than expected yield numbers came as a bit of a surprise given the hot temperatures that prevailed last month, making July the hottest on record. With the start of the school year here, there is growing concern over COVID-19 outbreaks as students return to their classrooms. As a result, many states and school districts have already opted to keep classes online this fall, and that could prove problematic for an industry that relies on school lunch program to place large volumes of fluid milk.

Hope had been building on a recovery of demand overseas as the Global Dairy Trade auction results from earlier in the week did see skim milk powder (the international equivalent of nonfat) advance 1.1 percent.

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U.S. nonfat dried milk vs. world skim milk powder

Source: Trade sources, McKeany-Flavell
Posted by: Information Services
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