What’s Driving The Milk Market?

Wisconsin milk production in April was up 2 percent from last year, according to the latest numbers from USDA. And the national milk production numbers were overall flat. This was a surprise to the marketplace, says Ever.Ag dairy broker Katie Burgess.

“The market was anticipating that milk production would be down across the U.S., and so seeing it more or less flat came at a bit of a surprise,” she says. “The Midwest saw the best year-over-year growth since 2021.”

She explains that’s why the milk price plummeted following the report.

“It took the wind out of the sails a little bit,” she says of the report. “My message for dairy producers out there would be that milk prices are still really good… a much better price than we’ve seen really all year.”

See the report: https://www.midwestfarmreport.com/2024/05/20/wisconsin-milk-production-up/

When it comes to the dairy herd, Burgess says there’s a heifer shortage as farmers breed their dairy cows to beef. She doesn’t predict the beef-on-dairy trend to end anytime soon.

“At Ever.Ag, our expectation is that milk production will remain slightly positive later this year, up a few tenths of a percent, but we’re not expecting any of the 2 percent milk production growth that has been common for the better part of the decade,” she says.

On the horizon, Burgess is optimistic about cheese and butter prices. She says retailers are starting to promote cheese, which is part of the reason for the uptick in the Class III milk market. Burgess says consumer demand is still concerning as people deal with inflation and try to decide what to spend their money on.

“Thankfully, as retailers have been promoting dairy products a little bit to get people in the stores, that has resulted in some better uptake,” she says.