In your September 10 issue . . .
SLIDING HEIFER NUMBERS WILL LIMIT growth in the U.S. dairy herd. In August, USDA estimated there were 3.75 million heifers over 500 pounds. While down only 1.3% from the same time last year, that figure was off a whopping 10.7% from the 4.2 million head five years ago.
THE TRIPLE PLAY of genomics, sexed semen, and, most importantly, beef semen use on dairy cows has continued to shift inventories on U.S. dairy farms. The ever-rising costs to raise heifers has played the largest role, and hence, a record 8.7 million units of beef semen were sold in the U.S. last year. That compares to just 4 million units in 2018.
HIGH FEED PRICES AND BUILDING COSTS, along with labor shortages, appear poised to continue to hold down U.S. milk production for the remainder of 2022 and well into 2023. In August, milk output posted the only gain so far this year, 0.2%, reported USDA statisticians.
WILL MILK PER COW REBOUND? “USDA is currently projecting milk per cow growth at just 0.4% for 2022, the slowest rate of gain since 2001,” noted the University of Missouri’s Scott Brown. “This follows the relatively weak growth of 0.7% in 2021. The last time we experienced two consecutive years of growth rates less than 1% was 2008 to 2009.”
WHILE DECLINES IN THE RATE of productivity growth have been occurring for decades, average growth in the 1980s was 2.24%, followed by 2.18% in the 1990s, 1.48% in the 2000s, and 1.3% in the 2010s. “It is rare to string multiple years of growth below 1%,” observed Brown.
THE UNIQUE COMBINATION OF SLOW GROWTH and inflation have caused milk and dairy product prices to remain strong. In July, dairy generated $6.5 billion in sales, with each week experiencing dollar growth in the high teens, on a percentage basis, when compared to the same week last year. “Milk was the biggest seller, followed by cheese,” shared the International Dairy Deli Bakery Association’s Jessica Ives.
MORE WHEY EXPORTS HAVE HEADED CHINA’S WAY as the world’s largest dairy product importer purchased more U.S. whey in July since it had in the summer of 2018. While tariffs ranging from 35% to 40% remain on U.S. milk powder, butter, and cheese, whey has been deemed important for the Chinese as they feed the world’s largest swine herd.
MILK PRICE PROSPECTS held relatively steady from early August to late-August trading on the CME, with Class III moving up a dime to reach $20.95. Meanwhile, the September-to-December contracts for Class IV climbed $1 to reach $23.50 by the magazine’s close on August 25.
THE U.S. DAIRY SECTOR will have to grapple with how to move more dairy products to the Southeast as the region continues to lose milk production and experiences population growth. For more, turn to page 491.