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The University of Tennessee | Institute of Agriculture

Department of Agricultural and Resource Economics

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Milk Market Comments

By Andrew Griffith

February 28, 2017

Milk Production: Milk production in the 23 major states during January totaled 17.0 billion pounds, up 2.7% from January 2016. Production per cow for January averaged 1,957 pounds. The number of milk cows was 8.69 million head, up 5,000 head from December 2016. December production was revised down 0.1% to 16.8 billion pounds. For milk production in the top 5 producing states, California was down 0.6% from January a year ago; Wisconsin up 1.0%; Idaho up 1.0%; New York up 3.8%; and Texas up 19.2%. Other states with large production increases were New Mexico (15.3%), Kansas (8.5%), Colorado (6.6%), Iowa (3.8%), and Michigan (3.5%). The states reporting a large decline in production compared to January 2016 were Oregon (-2.8%), Florida (-1.3%), and Virginia (-0.7%).

Milk Price and Utilization: The Southeast Uniform milk price for January was $20.27, up $0.49 from December and $2.67 higher than January 2016. The Appalachian Uniform milk price was $20.06, up $0.72 from December and $3.03 higher than January 2016. January’s Class III price was $16.77, down $0.63 from December, and $3.05 higher than January a year ago. The Class IV price was up $1.22 from December to $16.19, and $2.88 higher than January 2016. The Class I Mover price for March is $16.90, up $0.17from February. The milk/feed ratio for January was 2.69, 0.01 lower than December.

Southeast Class I utilization was 69.76%, down 1.88% from December, and 3.08% lower than January a year ago. The Uniform butterfat price was $2.4696, up 21.05 cents from last month and 15.09 cents lower than January 2016. The January Class I price was $21.25. February Class I price is $20.53. Appalachian Class I utilization was 72.88%, up 1.35% from December, and 0.70% higher than January a year ago. The Uniform butterfat price was $2.4699, up 20.60 cents from last month and 11.70 cents lower than January 2016. The January Class I price was $20.85.

Cheese Production and Stocks: Total cheese production in December was 1.05 billion pounds, up 1.3% from a year ago while butter production was down 6.7% to 164 million pounds. Nonfat dry milk (NDM) production was up 3.2% compared to a year ago with total production at 156 million pounds while skim milk powder (SMP) production was up 18.7% to 51.6 million pounds compared to a year ago. Total cheese stocks at the end of January were up 5% from January a year ago and up 3% from the previous month while butter stocks were up 34% from last month and up 16% from a year ago.

Springer Prices and Cow Slaughter: At Smiths Grove, Kentucky on February 21, supreme springers were $1,450 to $1,650, up $37 compared to last month. US approved springers sold from $1,350 to $1,425 on the same auction, down $13 compared to last month. Dairy cow slaughter in January was 269,000 head, up 16,000 head from December and 3,500 more than January 2016.