US: Most dairy markets come back strong

Dairy markets have digested a lot of bad news in recent months. A renewed focus on the economic and demographic slowdown in China and a shift towards higher milk production in the US and Europe emboldened the bears. In Chicago, cash dairy and milk contracts hit multi-year lows in January. The powders were particularly pitiful. But this week most markets came back strong. It appears that the dairy trade may have been overly pessimistic. Last week's milk production report showed slower-than-expected growth in US milk production, and this week the USDA hit the dairy complex with two more pieces of data suggesting slow growth ahead. . Just 2.77 million dairy heifers were expected to calve and enter the milking herd this year, according to the agency's annual Livestock report. That's 2% less than last year and the smallest dairy heifer inventory since 2004. If dairy farmers develop an appetite for expansion, heifer shortages will drive up the value of dairy cows, increasing the cost of ...