Opinión

W47 Dairy Update: US Milk Production Expected to Slow Down in 2023 and 2024 While Raw Milk Producers in Brazil Struggle With Falling Prices

Leche de vaca
Brasil
Market & Price Trends
Mantequilla de leche de vaca
China
Publicado 30 de nov. de 2023
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In W47 in the dairy landscape, Tridge’s analysis indicates that US milk production is projected to reach 227.1 billion lbs by the end of 2023, a 500-million lb decrease from the Oct-23 projection. The first three quarters of 2023 saw a modest 0.25% growth compared to the same period in 2022, but Q3-23 witnessed a 3.39% decline over Q2-23. This signals a production deceleration attributed to diminishing milk cow numbers. The outlook anticipates a continued decline in both US milk cows and production per cow in Q4-23 and throughout 2024. In Brazil, Cepea reports a raw milk price of USD 0.41 per liter, contrasting with a significant decline faced by Dutch breeders in Rio Grande do Sul. Despite expectations of stabilized or slightly increased prices, challenges persist. Meanwhile, China prioritizes high-quality milk development through scientific initiatives, including the 2023 International Symposium attended by over 400 global experts.

US Milk Production Expected to Slow Down in 2023 and 2024 Due to Declining Dairy Herd

Tridge's analysis reveals that United States (US) milk production is projected to reach 227.1 billion pounds (lbs) by the end of 2023. This reflects a 500-million lb decrease from the Oct-23 projection but still a 0.26% increase compared to the 2022 volume. US milk production experienced a modest 0.25% growth in the first three quarters of 2023, totaling 170.99 billion lbs. However, Q3-23 witnessed a 3.39% decline over Q2-23 and a marginal 0.07% dip compared to Q3-22. This scenario signals a deceleration in production attributed to diminished milk cow numbers and declining production per cow.

According to the United States Department of Agriculture (USDA), the number of milk cows in the US stood at 9.38 million heads in Q3-23, a 0.42% decrease from Q2-23 and a 0.32% decline from Q3-22. This drop is linked to increased cull rates and squeezed profit margins in the dairy sector. The USDA also notes that milk production per cow reached 5.98 thousand lbs in Q3-23, a 3.08% decrease from Q2-23 and a slight 0.33% drop compared to the same period in 2022. The outlook anticipates a continued decline in both US milk cows and production per cow in Q4-23 and throughout 2024, with a further deceleration in milk production in the coming year.

The USDA reports that US milk production in the 24 major producing states reached 17.9 billion lbs in Oct-23, a marginal 0.001% month-on-month (MoM) increase but a 0.004% decrease from the same period in 2022. The average production per cow stood at 2,013 lbs in Oct-23, a slight decrease of three lbs per cow compared to Oct-22. The number of milk cows on farms was 8.91 million heads, a reduction of 5 thousand heads from Sep-23 and a decline of 19 thousand heads from Oct-22. Total US milk production amounted to 18.7 billion lbs, with 9.37 million heads of cows. California led in milk production with 3.31 billion lbs, followed by Wisconsin with 2.69 billion lbs, and Texas with 1.4 billion lbs. Michigan retained its position as the state with the highest average production per cow at 2,240 lbs.

Dutch Raw Milk Producers in Brazil Struggle with Falling Prices

According to the Center for Advanced Studies in Applied Economics (Cepea), the average price of raw milk to producers in Brazil stands at USD 0.41 per liter. However, Dutch cattle breeders in Rio Grande do Sul face a more significant decline, exacerbated by consecutive years of droughts and floods in some regions. The president of the Rio Grande do Sul Dutch Cattle Breeders Association (Gadolando) anticipates a challenging short-term scenario with ineffective measures to address ongoing problems. He also emphasizes the need for concrete actions, stating that discussions have yet to yield practical solutions.

Despite numerous drops, raw milk prices are expected to stabilize or experience a slight increase, providing some relief to producers. The Instituto de Laticínios Cândido Tostes suggests a potential 0.2% drop before witnessing an interruption in the series of five consecutive declines in milk prices. The president of Gadolando underscores the stagnant market discussion around government actions, emphasizing the need for timely implementation. Cepea attributes the over 30% drop in milk prices in 12 months to heightened imports of dairy products, sluggish domestic consumption, and increased product availability due to national funding expansion.

China Embraces Scientific and Technological Innovation in Dairy Sector

Despite an increased demand for dairy products, China still lags behind the global average in per capita consumption. In response, China has prioritized scientific and technological innovation, incorporating the national high-quality milk project into the National Nutrition Program for three consecutive years. Initiatives launched by the Chinese Academy of Agricultural Sciences (CAAS) in 2013 included various research items focusing on dairy cattle breeding, pasture utilization, food nutrition regulation, disease prevention, green processing technology for dairy products, and quality and safety monitoring. Establishing the National Dairy Science and Technology Innovation Alliance in 2016 has played a pivotal role in steering the implementation and technology standardization of the high-quality milk project. In 2023, state approval for the certification and marking management of the high-quality milk project was granted, solidifying the creation-processing-consumption link in dairy farming.

The CAAS also advocates for intensified international academic exchanges and cooperation to propel the high-quality development of the sector. Notably, the 2023 International Symposium on Dairy Cow Nutrition and Milk Quality, a crucial scientific collaboration platform, witnessed the participation of over 400 experts globally, including China, the US, New Zealand, Ireland, and other regions. They presented academic reports on various facets of dairy production, including health, milk quality, and consumption.

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