US Milk Output Expected To Rise 1.4% Annually; Demand To Keep Growing

US milk production is expected to increase at a compound annual growth rate of 1.4 percent per year over the next decade, to 250.4 billion pounds by 2029, according to USDA Agricultural Projections to 2029, which was released last Friday by USDA’s Office of the Chief Economist.

The long-run projections in the report are a conditional scenario based on specific assumptions about the macroeconomy, ag and trade policies, the weather, and international developments. Among other things, provisions of the 2018 farm bill are assumed to remain in effect, and the report assumes that there are no domestic or external shocks that would affect global agricultural markets.

Thus, the projections are not intended to be a forecast of what the future will be, but instead are a description of what would be expected to happen under these very specific assumptions and circumstances.

Projections in the report were prepared from July 2019 through January 2020 and reflect a composite of model results and judgment-based analyses. Recent trade deals or discussions such as the Phase I deal with China, the US-Mexico-Canada Agreement, and the Japan-US agreement were not considered for these projections.

The projections assume that the agricultural sector will continue to adjust to the China-US trade tensions as they existed in October 2019 (which were assumed to last the duration of the projection period). This results in an expected shift away from US soybean acres (about 5 million acres below the recent high of 90 million acres in 2017/18) due to lower returns relative to corn.

Prices for most crops continue to remain low relative to the recent past as US and global production responded to the earlier high prices. Prices are expected to rise slowly over the 10-year projection period for most crops, with the exception of soybeans. The soybean price is expected to dip over the next two years before moving up thereafter.

Relatively low feed costs are expected to continue to improve livestock-sector net returns.

Milk production is projected to grow throughout the projection period due to upward trending milk prices and slowly rising, but relatively low, feed prices. Milk cow numbers are expected to reach 9.5 million head by 2029, up from about 9.3 million head at the end of 2019. Milk per cow is expected to grow at a compound annual growth rate of 1.2 percent, to 26,270 pounds by 2029.

Commercial use is expected to rise faster than the growth in the US population over the next decade. Domestic demand for cheese is expected to increase due to continued greater consumption of prepared foods and increased away-from-home eating. Butter demand is also expected to grow, in part due to changing consumer perceptions about the health implications of consuming milkfat.

The decline in per capita consumption of fluid milk products is expected to continue in the next decade, the report stated.

Global demand is expected to continue to grow over the next 10 years, with the largest increases being in exports of cheese, nonfat dry milk, and whey. By 2029, US dairy exports are expected to be 4.5 percent of milk production on a milkfat milk-equivalent basis and 20.5 percent on a skim-solids milk-equivalent basis.

Domestic commercial use on a milkfat basis is projected to increase from 217.8 billion pounds this year...

For more on this story, visit

EDITORIAL COMMENT: Toddler ‘Milks’ Appear To Be Hurting Sales Of Real Milk

OTHER NEWS:
FDA Reopens Comment Period On Principles For Modernizing Standards

OTHER NEWS:
Coronavirus Disrupting China’s Entire Dairy Supply Chain; Imports Could Fall

GUEST COLUMNISTS: Lots of Uncertainty in Dairy Markets by Dr. Bob Cropp

COMPANY PROFILE: Alemar Cheese Moves To Minneapolis; Sister Company Grows In California

PREVIOUS COLUMNS:

Perfect Day at the Dairy Forum by John Umhoefer, WCMA

The Bakery Methods of Accounts Receivable: To Collect...Take a Number by Jen Pino-Gallagher, M3 Insurance

‘Ending the War on Artisan Cheese’
A Book Review by Dan Strongin

‘Sir, There’s a Minnow in my Muenster’:
Recall Insurance Past And Present by Jim Brunker, M3 Insurance

Innovation Is Key To
Dairy Growth by Rebekah Sweeney

Boots On The Ground
by Jim Cisler

As FSMA Takes Full Effect, Partnership Opportunities Abound To Improve Food Safety Practices by Larry Bell and Jim Mueller

   Subscribe

What do you think about
this week's  Story?

Please include an e-mail address if you would like a reply.

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