USDA reveals an unexpected increase in national and state dairy herd numbers kicking off 2023.
After 2022 ended on two months of decline, the market was prepared for another modest round of culling and further declines in the herd ahead of the latest milk production report for February. Instead, USDA surprised the market with a nominal increase in both the national and 24-state herds to 9.405 million and 8.927 million, respectively.
Typically, once a dairy operation begins expanding or reducing its herd, the trend continues for several months, so the increase following two straight monthly reductions is unexpected. Perhaps dairy farmers are reluctant to aggressively cut herds ahead of the spring flush, when the herd hits peak productivity with higher milk yield and output. Thus, any substantial cuts in herd may be delayed until H2 2023. If this is the case and the herd stays steady through spring, milk output should remain strong in H1.
Total milk output was reported up 1.3 percent for the month, suggesting there is more than enough milk around the country to meet demand. Output for the top 24 states rose by 1.5 percent.
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