We expect a good year for dairy farmers, much welcomed after a long period of negative margins in 2023 and into last year. While recent milk checks weren’t as strong as September’s $23.34 per hundredweight Class III settlement and $22.29 Class IV price, still healthy prices combined with sharply reduced feed costs should create profitable margins for most farmers throughout this year.
Global Milk Supply Trends
Globally, the second half of 2024 marked a turning point for milk supply growth across the Big 7 export regions. Year-over-year production gains were around 0.5%, offsetting the 0.5% YOY decline in 2H 2023. However, volume growth is not expected to overwhelm the global market. RaboResearch forecasts milk supply growth of 0.8% in 2025.
U.S. Dairy Production Insights
In the U.S., November milk production declined 1% versus the prior year, breaking a streak of three straight months where year-over-year gains were realized. The decline was driven by the avian influenza outbreak that is ravaging California; the state showed a 9.2% YOY output decline. While California sees challenges, RaboResearch expects US milk production will increase this year after three straight years of stagnation. Higher milk production coupled with strong components should drive an increase in product output, opposite the 1.7% cheese production decline noted in November. Butter production continued higher though, with output up 4.4% year-over-year, but nonfat dry milk/skim milk powder production fell 10.9%, yet again aligned with the year-to-date trend of weaker output.
By Lucas Fuess
February 14, 2025
Comentarios