HighGround: milk production comments
HighGround: June 2013 milk production comments
2013 continues its streak of better-than-expected milk production reports, with June 2013 production showing 1.5% growth over the previous year, noted Eric Meyer, President, HighGround Dairy Division.
Making this report even more impressive is the turnaround in the Southwest and May revisions. Texas milk production grew by nearly 2%, ending 12 straight months of year-over-year declines. New Mexico production increased 1.2% in June. after 11 of the past 12 months came in negative. Even California producers only missed their 2012 mark by just 0.8%.
Why the big turnaround? Weather is the biggest factor. Summer temperatures arrived late for most areas of the country, and this was favorable for producing milk while unfavorable for grilling demand. Prices on most dairy commodities in the U.S. fell throughout the month of June.
But while this report may be viewed as bearish by some based on how the actual figures came in vs. expectations (and a pretty hefty revision higher in May), we believe other than a simple knee-jerk reaction downward, this report will mean nothing in the near term, and current fundamentals (summer heat, strong global prices, seasonal demand) will carry dairy commodity prices higher over the next 30-60 days.