Recent data from the U.S. milk production report indicates a slight year-over-year decrease of 0.9% in May. This reflects the ongoing adjustments in the dairy sector. Kathleen Wolfley, an agriculture broker with Ever.Ag, shared insights on the current trends and implications for the industry.
“We had a milk production report that came out which gave us a glimpse of where we landed in May. Milk production for the total U.S was down nine-tenths of a percent year-over-year. That was a little below our expectations. But overall, we call the report fairly neutral, considering the fact that markets have been pretty strong here in the last several weeks,” said Wolfley.
Despite this slight decline, the addition of 5,000 cows between April and May, particularly in Texas and New Mexico, suggests targeted growth in regions not previously noted for such expansions. The influence of avian influenza (HPAI) on milk production has also been closely monitored, though its impact appears minimal.
Market conditions have led to tight supplies of fresh cheese, impacting inventory levels and driving prices. “We’ve been in a bit of a short squeeze on fresh 4 to 30-day-old product, which is driving prices. Exports have been strong, with over 100 million pounds exported in April for the second month in a row. This means we haven’t had a lot of extra products to put into cold storage, leading to a dip in inventory,” Wolfley explained.
The May cold storage report showed a 4.2% year-over-year decrease in American cheese stocks, highlighting the impact of strong export demand and tight supplies.