This Dairy Economic Update includes information on the February 2016 milk production report, Livestock Gross Margin for Dairy and retail dairy product prices. This and other U.S. dairy industry news can be found here.

Natzke dave
Editor / Progressive Dairy

February milk production a bit of a ‘leap’

February 2016 U.S. milk production rose 4.6 percent compared to a year earlier, but before you panic over the potential negative impact on prices, most of the increase is due to the leap year’s extra day. When adjusted, the increase was just 1.0 percent on a daily basis, according to USDA’s monthly milk production report, released March 18.

Nationally, February 2016 milk production was estimated at 16.9 billion pounds. Cow numbers were estimated at 9.31 million head, 2,000 more than January 2016 and 4,000 more than February 2015. On a daily basis, milk production per cow was up about 0.5 pound from a year earlier.

Major dairy states

February 2016 daily production was also up 1.0 percent in the 23 major dairy states, to 15.8 billion pounds.

USDA revised January 2016 23-state production downward, to 16.6 billion pounds. It represented a 0.2 percent increase from January 2015.


Cow numbers in the 23 major dairy states were estimated at 8.63 million in February 2016, 2,000 more than January 2016 and 8,000 more than February 2015. Compared to a month earlier, cow numbers changed in just two states, up 1,000 head in Michigan and New Mexico.

Compared to a year earlier, cow numbers were down in 10 states and up in nine states. Still feeling the effects of winter storm Goliath, cows numbers declined 13,000 in Texas and 12,000 in New Mexico. California also saw a decline of 5,000.

Those declines were more than offset by year-over-year increases in Michigan and South Dakota (each +11,000), Idaho (+7,000), Wisconsin (+5,000) and New York (+4,000).

Production per cow in the 23 states averaged 1,833 pounds during February. On a daily basis, milk production per cow was up about 0.6 pound from a year earlier.

Read the full monthly USDA Milk Production report.

Next ‘Protecting Your Profits’ conference call is March 23

Pennsylvania's Center for Dairy Excellence will host the next “Protecting Your Profits” conference call on Wednesday, March 23, 12-12:15 p.m. (Eastern). Alan Zepp, risk management program manager, will provide an overview of current dairy markets and margins, including opportunities through Livestock Gross Margin for Dairy (LGM-Dairy).

Anyone can participate in the free monthly conference call series, but pre-registration is required. To register, call the center at (717) 346-0849 with name, phone number, and e-mail address. Once registered, participants will receive the call-in number and information.

In addition to participating live, calls are hosted in a webinar format and recorded, available for later viewing. Past Protecting Your Profits calls can be accessed under “Dairy Information” at the Center for Dairy Excellence website.

CWT assists with 4.1 million pounds of cheese, WMP exports

Cooperatives Working Together (CWT) accepted five requests for export assistance to sell 178,574 pounds of Cheddar and Monterey Jack cheese and 3.88 million pounds of whole milk powder to customers in Asia, Oceania and South America.

Bids were accepted from Dairy Farmers of America, Land O’Lakes, Maryland-Virginia Milk Producers Association and Northwest Dairy Association (Darigold). The product has been contracted for delivery in the period from March through September 2016.

So far this year, CWT has assisted member cooperatives to sell 9.994 million pounds of cheese, 7.716 million pounds of butter and 10.728 million pounds of whole milk powder to 14 countries. The sales are the equivalent of 344.2 million pounds of milk on a milkfat basis.

February 2016 dairy Consumer Price Index lower

February 2016 retail dairy product prices were mostly lower compared to the previous month and year, according to unadjusted monthly Consumer Price Index (CPI) data released by the Bureau of Labor Statistics.

The February 2016 average fresh fluid milk price at retail was down 5 percent from February 2015, helping push overall retail dairy product prices down 2.6 percent. That compares to a 0.3 percent decline for retail prices for all food eaten at home.

February 2016’s average cheese price was down 2.5 percent from a year earlier, but butter was up 1.6 percent. Whole fluid milk prices were down 6.2 percent, with “other” fluid milk down 4.2 percent.

Compared to January 2016, retail dairy product pries were down 0.5 percent, led by declines in fluid milk, cheese and butter prices. PD

Dave Natzke