LUBBOCK, TX – Record milk production is weighing on dairy prices and could pressure producer margins in the months ahead.
Texas A&M AgriLife Extension Livestock Marketing Economist Dr. David Anderson reports May marked the 15th straight month of year-over-year milk production growth. U.S. milk production totaled 20.565 billion pounds, up 2.3 percent from last year and the largest monthly total on record.
Production per cow also reached a record 2,128 pounds. Texas added 28,000 milk cows from a year earlier, continuing rapid dairy growth in the Panhandle. Florida and Georgia also added cows, while Virginia declined slightly.
Anderson says strong milk prices, expanding processing capacity, high calf and cull cow prices, and lower feed costs helped drive production growth. But dairy product prices are now sliding, including nonfat dry milk, cheese, butter, and whey.
Lower product values should start showing up in milk checks soon. Producers also face higher fertilizer and fuel costs, as well as record replacement heifer prices.
Farm-Level Takeaway: Dairy producers should prepare for tighter margins as record production pushes milk prices lower.