“We told dairy farmers for five to seven years that fat was valuable,” said Phil Plourd, president of Blimling and Associates. “When butter went to $3 per pound for the first time and was averaging well over $2 for months, we told dairy farmers this fat is valuable, and what did dairy producers do?
“They made more fat.”
The dairy market analyst shared that picture of the U.S. dairy industry in recent decades on the February 24 Hoard’s Dairyman DairyLivestream sponsored by AMS Galaxy USA as the discussion focused on how much milk might be produced in 2022. That’s the question on the minds of dairy farmers as milk prices climb with tighter supplies and an unclear vision of how long that might last.
Milk production has certainly continued to rise with advancements in animal efficiency, as 2021 total production was up 1.4% compared to 2020. But an impressive story is also being told by milkfat, which was up 2.8% last year over the year prior. Skim solids were also 1.9% higher.
“That’s hardly marginal,” said Cornell University’s Andy Novakovic.
The national average fat test in the U.S. last year hovered near 4%, marking the first time the average was at that threshold. Just 10 years ago, that number was closer to 3.7%.
The panelists discussed a number of factors contributing to this improvement, including greater genetic selection for components, detailed feeding strategies, and more Jerseys in the national dairy herd. Since milkfat has become more valuable to dairy processors and consumers have largely come back around on the healthiness of dairy fats, those strategies are making dairy producers more money with a more valuable product.
“Why would we go backward on any of that?” Plourd posed.
To watch the recording of the February 24 DairyLivestream, go to the link above. The program recording is also available as an audio-only podcast on Spotify, Google Podcasts, Apple Podcasts, and downloadable from the Hoard’s Dairyman website.
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