Rising cow numbers raise questions about milk prices amid demand uncertainty.
The U.S. dairy herd has expanded to its largest size since 2021, reaching 9.43 million cows in May, with year-over-year growth of 17,000 head. This marks the fifth consecutive monthly increase and reflects producers’ confidence in sustained milk demand despite mixed market signals.
Milk production per cow also saw a slight uptick, leading to a total milk output of 19.95 billion pounds in May, up 0.7% from a year ago. These gains are concentrated in key states like Texas and Wisconsin, while states like California showed modest declines.
The surge in herd size raises questions about milk price sustainability. While current Class III and Class IV futures suggest some optimism, analysts caution that the increasing supply could pressure prices if domestic and export demand doesn’t keep pace.
Producers are closely watching feed costs and input markets, which could influence future herd decisions. Recent margins have improved slightly, but uncertainty persists with global trade tensions and inflation still looming.
Long-term outlooks depend on whether the market can absorb the extra milk efficiently. Export performance and consumer trends will be key in determining if prices can hold firm or face downward correction.
Source: Dairy Herd Management – Read the full article here
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