USDA Projects Steady Growth in U.S. Milk Production Over the Next Decade
Source: DairyNews.today
The U.S. Department of Agriculture (USDA) has released its ten-year baseline projections, indicating consistent growth across key dairy metrics, including cow numbers, milk production, and dairy product prices.
Market Dynamics in 2024
Recent dairy market trends have revealed contrasting price movements. While cheese prices have plummeted to their lowest levels since April, butter prices have stagnated since October following a sharp decline from late August highs. Conversely, nonfat dry milk and dry whey have reached their highest price levels since late 2022 and early 2022, respectively.
The mixed performance in dairy prices has moderated declines in Class III and Class IV milk prices. Milk production, which was expected to rebound this fall, has remained subdued alongside weaker-than-anticipated demand, particularly for butter and cheese. Buyers, focusing on contracted orders, have maintained sufficient inventories, limiting spot market activity.
Production Trends
Milk production has been more resilient than previously projected, despite concerns over tight heifer supplies and an aging cow population. Improved output per cow has compensated for a reduced herd size, with August production up 0.4% year-over-year and September showing a 0.1% increase despite 38,000 fewer cows. While isolated cases of bird flu have affected some farms, the overall impact on milk supply has been minimal.
Long-Term Outlook
The USDA projects steady growth in cow numbers, milk production, and average prices through 2034. Key projections include:
Cow Numbers: Expected to rise to 9.502 million by 2034.
Milk Production: Estimated to increase from 225.8 billion pounds in 2024 to 253.1 billion pounds by 2034, with annual growth averaging 2.73 billion pounds.
Milk Yield per Cow: Predicted to climb from 24,195 pounds in 2024 to 26,630 pounds in 2034.
Price Projections
The USDA forecasts record average milk prices over the next decade. The all-milk price is projected to average $25.58 per cwt in 2034, driven by sustained growth in production and demand.
Dairy product price projections include:
Cheddar Cheese: Expected to rise from $1.88 per pound in 2024 to $2.14 per pound in 2034.
Dry Whey: Predicted to increase 6 cents to 54 cents per pound.
Nonfat Dry Milk: Projected to gain 4 cents, averaging $1.27 per pound.
Butter: The only category forecast to decline, with the average price reduced by 5 cents to $2.87 per pound in 2034.
Challenges and Opportunities
While the USDA's projections reflect optimism for steady growth, market volatility and external factors, including global trade dynamics and geopolitical events, will continue to influence dairy prices. Farmers must remain proactive, leveraging price fluctuations to secure profitability and bolster financial resilience.
As the dairy industry navigates these challenges, the USDA's long-term outlook underscores a commitment to innovation and adaptation, ensuring sustained progress in the years ahead.
Recent dairy market trends have revealed contrasting price movements. While cheese prices have plummeted to their lowest levels since April, butter prices have stagnated since October following a sharp decline from late August highs. Conversely, nonfat dry milk and dry whey have reached their highest price levels since late 2022 and early 2022, respectively.
The mixed performance in dairy prices has moderated declines in Class III and Class IV milk prices. Milk production, which was expected to rebound this fall, has remained subdued alongside weaker-than-anticipated demand, particularly for butter and cheese. Buyers, focusing on contracted orders, have maintained sufficient inventories, limiting spot market activity.
Production Trends
Milk production has been more resilient than previously projected, despite concerns over tight heifer supplies and an aging cow population. Improved output per cow has compensated for a reduced herd size, with August production up 0.4% year-over-year and September showing a 0.1% increase despite 38,000 fewer cows. While isolated cases of bird flu have affected some farms, the overall impact on milk supply has been minimal.
Long-Term Outlook
The USDA projects steady growth in cow numbers, milk production, and average prices through 2034. Key projections include:
Cow Numbers: Expected to rise to 9.502 million by 2034.
Milk Production: Estimated to increase from 225.8 billion pounds in 2024 to 253.1 billion pounds by 2034, with annual growth averaging 2.73 billion pounds.
Milk Yield per Cow: Predicted to climb from 24,195 pounds in 2024 to 26,630 pounds in 2034.
Price Projections
The USDA forecasts record average milk prices over the next decade. The all-milk price is projected to average $25.58 per cwt in 2034, driven by sustained growth in production and demand.
Dairy product price projections include:
Cheddar Cheese: Expected to rise from $1.88 per pound in 2024 to $2.14 per pound in 2034.
Dry Whey: Predicted to increase 6 cents to 54 cents per pound.
Nonfat Dry Milk: Projected to gain 4 cents, averaging $1.27 per pound.
Butter: The only category forecast to decline, with the average price reduced by 5 cents to $2.87 per pound in 2034.
Challenges and Opportunities
While the USDA's projections reflect optimism for steady growth, market volatility and external factors, including global trade dynamics and geopolitical events, will continue to influence dairy prices. Farmers must remain proactive, leveraging price fluctuations to secure profitability and bolster financial resilience.
As the dairy industry navigates these challenges, the USDA's long-term outlook underscores a commitment to innovation and adaptation, ensuring sustained progress in the years ahead.
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