DAIRY MARKET REPORT VOLUME 27 | ISSUE 11
11/27/2024
OVERVIEW The monthly margin under the Dairy Margin Coverage (DMC) program in September set its second straight record high at $15.57/cwt, the result of relatively high milk prices and falling feed costs. Meanwhile, U.S. dairy export volumes are recovering from a mid-year slump, achieving in September the second highest percentage of domestic milk solids production for that month. Monthly milk production grew slightly in August and September, ending a consecutive 13-month stretch during which it remained below year-earlier levels, but increasing milk production remains difficult due to scarce dairy replacement heifers and high costs to build and equp facilities to accommodate bigger herds. Brisk increases in the component composition of producer milk continue to provide a relatively low cost means of increasing supplies to meet available demand that doesn’t require additional animals or facilities.
COMMERCIAL USE OF DAIRY PRODUCTS September fluid milk sales were down from a year ago by 1.6%, a more traditional year-over-year loss for fluid sales, but with sales above a year earlier for five out of the nine months so far this year, year to date fluid sales are still up over a year ago by 0.5%. Aggregate commercial use of milk in all dairy products is traditionally measured as milk equivalents. Milk equivalents of commercial use, in turn, are essentially measured as adjusted liquid milk production numbers. As a result, static to lower liquid milk production during the 2021-2024 period has translated into static aggregate growth in commercial use of milk (equivalent) in all products. Aggregate commercial use can also be measured by milk solids; USDA’s Economic Research Service provides commercial use data by both measures. Commercial use of milk solids in all dairy products is
DOMESTIC COMMERCIAL USE
essentially an adjusted measure of total milk solids production, which therefore shows a greater rate of growth than when use is measured by milk equivalents. For example, total commercial use (domestic plus exports) of U.S. milk in all dairy products grew annually by 0.6% during July through September measured by total milk solids (milkfat plus nonfat solids), but decreased by 0.3% measured by milk equivalent, total solids basis. Domestic commercial use of total milk solids declined by 0.3% during the period but was 1.3% below a year earlier on a milk equivalent, total solids basis. This difference of essentially an entire percentage point makes measuring total dairy consumption growth just one more issue that has become more complicated by the relatively recent growth in the component compostion of producer milk in the United States.
JUL-SEP 2024
JUL-SEP 2023
2023-2024 CHANGE
PERCENT CHANGE
(million pounds) Total Fluid Milk Products
10,501
10,361
140
1.4%
Yogurt
1,267
1,192
75
6.3%
Butter
583
536
47
8.7%