US update

Published 4 July 19

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Herd size

Annual data from the US recorded that the US herd size fell 0.1% (7,000 head) between 2017 and 2018, to stand at 9,399 thousand head. Estimated monthly data for US suggests that the number is still falling with a 0.9% drop between May 2018 and May 2019. The USDA has lowered the forecast for the size of the milk herd by 10,000 head for 2019, driven by higher culling rates, expected higher feed costs and the declines in the herd already seen this year.

Milk production

Milk production for 2018 stood at 95,850 million litres up 1.0% on last year.. The increase in production was due to an increase in milk yield, which now averages 10,197 litres per cow. Estimated data on US monthly production shows continued increases in milk yield, year on year, but the forecast for milk yield has been reduced to 10,297 litres  as the USDA suggests that higher feed costs are likely to affect production levels. Overall, forecast production has been amended to 96,120 million litres, down 220 million litres on the previous forecast due to the reduction in milk yield and the reduction in milking herd size.  

Milk price

The average price for all milk in 2018 was $16.20/cwt, $1.50 less than 2017. Current data suggests that milk price is higher than last year with the average price for all milk standing at $17.70/cwt for April 2019, 12.7% higher than April last year.  

Trade

In the summer of 2018, China levied supplementary tariffs on some products imported from the US, which included most dairy products. In May this year, they increased the level of some of these tariffs. The products subject to the latest round of increased tariffs include whey products, lactose, infant formula and casein products.

Also in the summer of 2018, Canada and Mexico levied some retaliatory tariffs on dairy products but these have been removed in May this year after the US removed the tariffs on steel and aluminium. The removal of the tariffs should mean that trade returns to business as usual between the countries. The tariffs still remain in place between the US and China though.  

 

Jennie Tanner