Milk production in the U.S. commonly fluctuates throughout the year, but what has been the trend throughout the past few years?

Curtis Bosma, vice president of HighGround Dairy (HGD), frequently joins Uplevel Dairy Podcast host Peggy Coffeen to provide dairy farmers with monthly updates in the industry. In the July 2024 episode, Bosma took a look at various trends in the fluid milk, cheese, butter, powders, grain and cattle markets.

Bosma analyzed USDA’s Milk Production Report up to May 2024 and noticed that milk production has continued to decrease, making May the “11th consecutive month of year-after-year declines.”

The data in the Milk Production Report only track gross pounds of milk in the U.S. and individual states – no other components are considered. Bosma specified that although gross pounds produced are declining, American component production is a lot stronger – specifically butterfat content and protein percentage.

This year, we are seeing much lower cheddar production (8.2% lower compared to where we were last year). However, exports of cheese have been very successful this year, with a lot of sales in Mexico.

Although cheese exports have increased, non-fat dry milk and skim milk powder exports have decreased more than 12% compared to 2023. Not only is 2024 down relative to 2023, but “2023 was also down relative to 2022, which was also down relative to 2021,” Bosma reported.

The whey market climbed higher throughout the first half of the year, along with the cheese industry, as a lot of customers are interested in whey’s high protein content. Retail sales for butter have also been very strong this year. As of July 18, the butter market was sitting at $3.13/lb.

Although the trends in the fluid milk, cheese, powder and butter markets are important to monitor, “the grain markets this last month have been where all the action’s been at,” Bosma said.

In 2023, a lot of farmers were dealing with relatively dry conditions, leading to stress on their crops and relatively high pricing. So far in 2024, the Midwest has been experiencing consistent, heavy precipitation as well as a heat wave. That is in contrast to much of the Mid-Atlantic, especially Virginia, that have seen drier than normal to extreme drought conditions.

In terms of the cattle market, Bosma mentioned live cattle are being priced at $180/cwt., which is the highest level since March, and feeder cattle being priced at record levels of $250 to $265/cwt. When looking at year-to-date slaughter data, U.S. slaughter rates are down 14.4% compared to last year.

Although there are a lot of factors in farming we can’t control, it makes a huge difference to track the aspects that we can. Tracking finances on the farm is essential, as it can help you make decisions during difficult financial times.

Bosma explained that one of the biggest mistakes he sees in the industry is “producers that are not tracking their margins… until we get into a situation where things are negative.” Then they are frantically looking for solutions. Being able to measure your farm’s daily margins and understand the potential financial impact of price shifts is “what running the business is all about.”

It’s no secret that milk revenue is one of the most important factors to track on a dairy farm, and HGD offers tools to help farmers better understand their dairy production. In fact, HGD has “been able to arrive at what [they] think is one of the most accurate answers out there for producers when looking to get a correct evaluation of their milk revenue,” Bosma said.

Besides milk revenue, farmers should track their feed cost on a granular level, herd replacement costs and labor and overhead.

No matter where you’re at with your financial recordkeeping on your farm, HGD is available as a resource for improvement or to better understand your farms margins. For more information on their financial consulting, visit highgrounddairy.com.

To listen to episodes of the Uplevel Dairy Podcast, visit upleveldairy.com.

by Kelsi Devolve