Editorial Comment Publisher/Editor



Dairy Producers Certainly Responded To Higher Butterfat Prices

Dick Groves
Cheese Reporter

September 17, 2021

Last year, for the first time since 2014, protein was the most valuable component on the Upper Midwest federal milk marketing order (as we reported in a story appearing on page 9 of last week’s issue), ending a five-year run during which butterfat was the more valuable component on the order.

This got us wondering what, if any, impact those higher butterfat prices over the 2015-2019 period had on dairy producers. More specifically, did dairy producers respond to those higher butterfat prices by boosting the fat content of their herds’ milk?

The answer would appear to be a resounding yes. It seems that dairy producers not only in the Upper Midwest federal order but nationwide have responded to higher butterfat prices by boosting the fat content of the milk being produced by their cows.

From a national perspective, going back four decades, there wasn’t a whole lot of change in the average milkfat content of cow’s milk for a number of years; indeed, between 1980 and 2010, it never got lower than 3.64 percent nor higher than 3.69 percent.

Interestingly, back when there was still a dairy price support program, USDA would routinely state that the support price was at a certain price per hundredweight “for manufacturing grade milk with an annual average milkfat content of 3.67 percent,” which was, as a 1989 USDA price support press release put it, the “national average” (and it was the national average in 1988). Milkfat content reliably fell within a very narrow range for years.

Things started to change in 2011, when the national average milkfat content “jumped” to 3.71 percent, up from 3.66 percent in 2010. From 2011 through 2015, the average milkfat content varied from that 2011 low to a high of 3.76 percent in 2013.

And then fat content started to increase steadily if not spectacularly, setting new record highs of 3.79 percent in 2016, 3.84 percent in 2017, 3.89 percent in 2018, 3.92 percent in 2019 and 3.95 percent in 2020.
Suffice it to say the days of stable milkfat contents under 3.7 percent are behind us.

What about at the state level? What about the fat content of milk in states that pool considerable volumes of milk on the Upper Midwest order, the subject of our story last week (and the subject of a study published every year)?

Wisconsin is by far the leading source of pooled milk on the Upper Midwest order; last year, more than three-quarters of the milk pooled on that order came from Wisconsin, and Wisconsin has been source of over 70 percent of the milk pooled on the order every year since 2014 (when it was the source of 68.4 percent of the order’s pooled milk).

Since federal order reforms were implemented starting in 2000, Wisconsin cows have generally been above the national average when it comes to milkfat content. Specifically, from 2000 through 2016, the milkfat content of Wisconsin milk ranged from 3.70 percent to 3.78 percent, with the notable exception of 2010, when it dropped to 3.65 percent.

Paralleling what was happening nationally, the milkfat content of Wisconsin’s milk then rose to 3.82 percent in 2017, 3.89 percent in 2018, 3.90 percent in 2019 and 3.92 percent in 2020. So during the period when butterfat was the most valuable component on the Upper Midwest order, the milkfat content of Wisconsin’s milk rose from 3.76 percent to 3.90 percent.

In neighboring Minnesota, average milkfat content has also historically been above the national average, and remains so today. Specifically, the milkfat content of Minnesota’s milk ranged from 3.70 percent to 3.76 percent between 2000 and 2011, then rose to 3.81 percent in 2012, first reached 3.90 percent in 2016 and has actually topped 4.0 percent over the last two years (4.05 percent in 2019 and 4.09 percent in 2020).

Minnesota’s milkfat content during the five years in which milkfat was the most valuable component on the Upper Midwest order rose from 3.86 percent in 2015 to 4.05 percent in 2019.

To more fully illustrate this pattern, we checked on the Mideast federal order, where milkfat was also the most valuable component from 2015 through 2019. We specifically checked Michigan and Ohio, the leading sources of milk pooled on the Mideast order.

Since 2000, the milkfat content of Michigan’s milk has generally been slightly below the national average, running between 3.59 percent and 3.70 percent every year through 2016. But after averaging 3.67 percent in 2016, it rose to 3.72 percent in 2017, 3.82 percent in 2018, and 3.83 percent in both 2019 and 2020.

Over the 2000-2015 period, Ohio’s average milkfat content varied within a fairly narrow range of 3.70 percent to 3.79 percent, with the exception of 2013, when it reached 3.84 percent. But after averaging 3.76 percent in 2015, it rose to 3.81 percent in 2016, 3.86 percent in 2017, 3.89 percent in 2018, 3.92 percent in 2019 and 3.91 percent in 2020.

This limited analysis does seem to confirm the fact the dairy producers responded to milkfat prices that exceeded protein prices by boosting the milkfat content of their cows’ production. This in turn begs the question:
What happens now, with milkfat less valuable than protein?

The answer appears to be: average milkfat content continues to increase.
During the first seven months of 2021, average national milkfat content was higher than a year earlier every month.

Producers know milkfat is still extremely valuable, and are responding accordingly..


Dick Groves

Dick Groves has been publisher/editor of Cheese Reporter since 1989. He has over 45 years experience covering the dairy industry. His weekly editorial is read and referenced throughout the world.
For more information, call 608-316-3791 dgroves@cheesereporter.com

Recent Editorials written by Dick Groves.

Airbus Tariffs Clearly Impacted US Cheese Imports From EU
September 10, 2021

Even A Pandemic Can't Help Fluid Milk Sales
September 3, 2021

Celebrate World Plant Milk Day? No, Thanks
August 27, 2021

Front-Of-Pack Food Labeling System Is A Terrible Idea
August 20, 2021

Climate Change Increasingly Likely To Change Ag Forever
August 13, 2021

Dairy Consumers Should Appreciate Current Bargain Prices
August 6, 2021

US Milk Supply Growing Impressively And Reliably
July 30, 2021

UK's Proposed Tax On Salt Is Both Idiotic and Dangerous
July 23, 2021

Standards of Identity: Help Or Hindrance?
July 16, 2021

Despite Aircraft Truce, US-EU Dairy Trade Still Dysfunctional
July 2, 2021

More States Producing A Billion Pounds of Milk Every Month
June 25, 2021

Revising Yogurt Standard of Identity Took Waaaaay Too Long
June 18, 2021

Hispanic Cheese Category Showing Consistent Growth
June 4, 2021

The Pandemic's Impact On Dairy Product Output
May 28, 2021

High Dry Whey Prices Remain Problematic
May 21, 2021

Class I Pricing Issues Seem Irresolvable
May 14, 2021

The Meteroric Rise of Texas Milk Production
May 7, 2021

High Butter Stocks Seem Appropriate For Strong Disappearance
April 30, 2021

The Short, Impactful Life of USDA's Food Box Program
April 23, 2021

Processed, Ultra-Processed And Value-Added Foods
April 16, 2021

Trade Barriers Aren't Going Away Anytime Soon
April 9, 2021

Impact of 1996 NCE Study Still Being Felt
April 2, 2021

US Needs An Independent Food Safety Agency
March 26, 2021

Some Dairy States Underrepresented On Ag Committees
March 19, 2021

Tone of US Trade Policy Seems Different
March 12, 2021

FDA's Traceability Proposal Needs To Be Rewritten
March 5, 2021

History Provides Context For US Dairy Trade Statistics
February 28, 2021

US Butter Production Finally Reaches 2 Billion Pounds
February 19, 2021

US Cheese Production Remains On An Impressive Roll
February 12, 2021

EU Seems Pretty Adept At This Trade Deal Thing
February 5, 2021

US Dairy Farmers Can Really Crank Out The Milk
January 29, 2021

Even in a Pandemic, Dairy Products Are a Great Bargain
January 22, 2021

10 Years With The Food Safety Modernization Act
January 15, 2021

New Dietary Guidelines As Anti-Milkfat As Ever
January 8, 2021

A Few Things Dairy Can Expect in 2021
Janaury 1, 2021



What do you think about 
Dick Groves' Comments?*

Please tell us if you are a
Dairy product manufacturer 
Dairy marketer /importer/exporter
Milk producer
Supplier to manufacturer



Cheese Reporter welcomes letters to the editor. Comments should be sent to: Dick Groves by Fax at (608) 246-8431; or e-mail your comments to
dgroves @cheesereporter.com.