A dairy economist says while recent dairy cow number
declines haven’t hit a record, they are quite large.
Nate Donnay with StoneX says September milk production data
shows year over year tightening, which was lower than he expected and continued
declines in the herd.
“The slowdown has come from both a very sharp drop in cow
numbers-it’s a dramatic drop—the USDA is saying 85,000 cows over the course of
four months,” he says.
Donnay says the declines are likely still a response to a
spike in feed costs and availability. He compares the shifts in
production and herd sizes to 2012 when feed availability was also tight because
of drought across the Upper Midwest.
Donnay says once farmers adjust to feed costs, he expects
growth to pick back up.
“With the herd down as much as it is down, it’s going to be
difficult to get significant growth in U.S. milk production,” he says.
“It sounds bullish, and it is.”
And while China’s demand growth is expected limited, demand
globally is strong which Donnay believes will keep prices supported in the New
Year.
Donnay shared his thoughts during his weekly outlook
forecast.
--Brownfield AgNews