Milk production numbers coming back inline

A dairy economist says the latest USDA reports suggest milk production is starting to flatten out as feed prices catch up with herd expansions.

“Given what’s happened on the feed cost side, I think production per cow is going to hang out pretty close to trend.”

Nate Donnay with StoneX says June milk production numbers were lower than he expected and are coming closer to trend lines compared to the first half of the year when growth was well above trend.  Also flattening are cow numbers.

“The USDA says the dairy herd fell by one thousand head between May and June,” he says.  “I was expected to the herd to start to fall between June and July, so this is happening about a month earlier than expected.”

Donnay also remains bullish on cheese prices but bearish for butter based on demand expectations.
Donnay shared his thoughts during his weekly outlook forecast.

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