U.S. milk production has fallen nearly one percent on the year. Despite the decline, ag brokers say the news was not a surprise, and the addition of cows this spring in certain areas may suggest targeted growth in areas that do not usually see expansion.
They found around 5,000 cows were added between April and May, arriving in places like Texas and New Mexico. Brokers with EverAg say these places have not seen much growth in recent years. It comes at a time when market conditions have led to a tight supply of cheese, sending prices higher.
Analysts say the squeeze was also evident in the May Cold Storage Report.
“Obviously, we’ve kind of gotten ourselves in this this position in the last several weeks, let’s say 6 to 8 weeks, or maybe even more than that, where the markets been in a bit of a short squeeze on fresh 4 to 30 day old product. That’s really what’s going to drive prices in Chicago, the currency in Chicago. When we have little blips in supply and availability, you can see the market move one direction or another depending on that availability of four to 30 day old or fresh cheese. Now we’re in this position where we have been a little tight on fresh cheese supplies. We’ve been exporting a lot. We saw exports in April up over 100 million pounds for the second month in a row. That means that., hey, we haven’t had a lot of extra products likely to put into the warehouse or into coolers,” said Kathleen Wolfley.
The next USDA milk production report will be out later this month.
