AFTER AN APRIL CLASS III PRICE OF JUST $15.50 PER CWT., the Class III futures average over $19 per cwt. for the rest of the year.
MEANWHILE, AVERAGE CLASS IV FUTURES sit in the $21 range for that same time period, continuing the spread between the two classes. The June Class III futures price did surpass the Class IV price in mid-May, the first time that has happened since September 2023.
APRIL MILK PRODUCTION CAME IN AT 19.1 BILLION POUNDS, down 0.4% from the year before. After revisions by USDA, March milk production was also down 0.7% year-over-year. In April, milk output grew 2.5% in Wisconsin; production was down 3.3% in Texas. Across the country, milk production per cow was up 0.4%.
IN THE FIRST QUARTER OF THIS YEAR, 747,600 DAIRY COWS were sent to slaughter, down more than 120,000 from the 870,600 head culled from January to March of 2023. More recently, during the week that ended on May 4, only 48,975 dairy cows were sent to slaughter.
CULLING IS NORMALLY LOWER DURING THE SPRING FLUSH, but this was the first time in nearly eight years that slaughter dropped below 50,000 head in a nonholiday week. According to Sarina Sharp from the Daily Dairy Report, slaughter has been about 6,400 head below historical trends since September.
DESPITE REDUCED CULLING, THE NATIONAL DAIRY HERD fell to 9.34 million head, down 8,000 from April 2023. A lack of dairy heifer replacements is partly to blame. At the beginning of the year, USDA predicted that about 2.5 million dairy heifers will calve and enter the dairy herd in 2024. Low heifer inventories mean some farmers must hang on to cows longer than they have in past years.
THE DAIRY MARGIN COVERAGE (DMC) PROGRAM’S calculated margin for March was $9.65 per cwt., the highest it has been since December 2022. The DMC margin is expected to stay on a positive trajectory the rest of the year due to an improved All-Milk price and lower prices for corn, alfalfa, and soybean meal compared to 2023.
A SECOND CASE OF AVIAN INFLUENZA IN A HUMAN was reported in May by the Centers for Disease Control and Prevention. The individual works on a dairy farm in Michigan where the H5N1 virus had been indentified in cows. As of late May, cows from 42 dairy herds located in nine states had tested positive for the disease.
USDA ALLOTTED ROUGHLY $98 MILLION to support dairy farmers affected by the outbreak. Funding is available for veterinary treatment, sampling costs, and other related expenses. Learn more on page 323.
HAY STOCKS JUMPED 47% COMPARED TO A YEAR AGO, according to USDA’s May Crop Production report. As of May 1, hay stocks stood just over 21 million tons, up 6.7 million tons from the year before. This spike followed three years of May 1 inventory declines. The recent May 1 hay stocks estimate was the highest reported since 2017.
BOTH BUTTER PRODUCTION AND INVENTORIES ARE UP compared to the previous two years, but that has not stopped prices from climbing over $3 per pound, reaching record highs for this time of year.
PERSISTENT INFLATION CONTINUES TO INFLUENCE Americans’ food purchases. In an attempt to attract customers, grocers and retailers are offering sales, more value menu options, and beefed-up loyalty programs. Promotions that encourage dairy product intake could be good for dairy farmers. Read more on page 287.
