Great news for dairy production!

The total U.S. herd climbed to 9.417 million cows in February, while the 24-state total rose by the same number to 8,939 million heifers, a level not seen since 2021.

With the herd size up over the past year and yield also exceeding 2022 levels, total milk volume is very likely to surpass last year’s output, potentially creating a short-term oversupply of milk. This should be good news for buyers as fundamentals lean on pricing.

Besides a larger herd and record yields early in the year, the cold storage report showed a healthy rise in U.S. butter stocks.

Butter inventories will likely keep growing over the next three to four months, dramatically exceeding last year’s levels and potentially rivaling levels back in 2021 in the wake of the pandemic and stay-at-home mandates. Without question, one factor behind rising cold storage stocks is displaced domestic demand now filled through import channels. That is unlikely to change in the near term, with stocks-building accelerating with peak flush as milk processors struggle to find homes for all their volume.

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Posted by: Information Services
Our Information Services team assists our clients with understanding commodity and ingredient market dynamics. Using our extensive database of intelligence, we also produce regular commodity and commercial market publications covering supply and demand fundamentals, news alerts on events that shape the markets, and resource guides to give you a complete picture of the industries we monitor.