This week’s USDA milk production report provided more bullish fuel as the national herd fell by a further -14,000 head to 9.4 million cows across the country, and milk yield, the volume of milk per cow per day, also fell below Oct 2020 levels. This continues a six-month trend of culling and three straight months of lower milk yields year on year (year).
A smaller herd and lower productivity obviously translate into less milk available, about 0.5 percent less in most last month vs. October 2020. This also cuts the year-to-date (YTD) positive milk output gains to 1.7 percent YOY, but that trend is also waning and will likely fall to up only 1.5 percent come December. As we had forecast, the total herd from year-ago levels and should continue falling for several more months; for now, the herd is down by some 47,000 heifers. Hopefully, we will see some stability return to the national herd in early 2022 and spring flush, which will serve as a baseline.
Meanwhile, global markets are still in disarray from ports bottlenecks and supply chain issues as the holidays and peak demand approach. Fonterra’s Global Dairy Trade auction showed a further rise of 1.9 percent in world dairy prices.