The National Milk Producers Association with support from Dairy Management, Inc. has issued its regular dairy market report for November. NMPF issued this statement summarizing the report.
USDA data through September shows the fastest four-month drop in milk and milk solids production growth in two decades, a dramatic turnaround from spring months, when cow numbers and production were growing the fastest in more than a decade. This trend has continued in October. The unwinding of dairy cow expansion over the same period has equaled that of the great collapse of cow numbers at the height of the 2009 milk price debacle. Media reports of herd dispersals, particularly among the larger herds that have driven previous expansions, supports this thesis. High feed costs, other cost inflation and labor availability this year may also be playing a role in this turn of events.
Amid this backdrop, milk prices nationally this year have oscillated around the low $18/cwt range and thus have not yet reflected any unusual developing supply tightness. Cheese production continues to claim much of the available milk increase, keeping a damper on cheddar prices. But production of other key dairy products that affect milk prices has been shrinking and their prices rising, buoyed by rapid escalation in world prices. Milk production and exportable supplies of dairy products have tightened considerably in Europe and Oceania in recent months, and import demand remains strong. Fourth-quarter data will be closely watched, with the sense that each month could shed a lot more light on this developing situation.
The full report can be found here… https://www.nmpf.org/dairy-market-report-november-2021/
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