ARLINGTON, VA – U.S. milk production increased 2.4% in August from a year earlier, but stronger output came as producer margins weakened under lower milk prices and higher operating costs.
The National Milk Producers Federation Dairy Market Report says the milking herd increased by 174,000 head to 9.717 million cows. Milk per cow rose 0.6%, while total liquid milk production reached 20.039 billion pounds.
The Dairy Margin Coverage margin fell to $9.34 per hundredweight from $9.93 in July. The All-Milk price declined 50 cents to $19.80, while estimated feed costs increased to $10.46.
Corn, soybean meal and alfalfa prices all remained above year-ago levels. Producers also continue facing elevated expenses for fuel, electricity, labor and borrowing, adding pressure beyond feed costs.
The report expects moderating feed costs and stronger milk prices to improve margins in November and December, although elevated fuel and hauling expenses remain a concern.
Farm-Level Takeaway: Growing milk supplies are increasing output while weaker margins keep dairy producers focused on feed, energy and financing costs.