US – Although the rate of the dairy herd contraction has slowed down considerably, the latest USDA’S Livestock, Poultry and Dairy Outlook, suggests that milk prices will increase.The September Milk Production report indicated that producers were culling at a slower pace than earlier projected. An improving feed outlook along with higher milk prices may have reduced the urgency to reduce herd size.
The October forecast places the dairy cow herd at 9,225 thousand head in the current year and 9,125 thousand head in 2013.
The residual effects of last summerâ€™s heat and pressure from high feed prices suggest a small reduction from Septemberâ€™s forecast of annual output per cow to 21,635 pounds this year, with a slight increase expected next year to 21,880 pounds. An improved feed price outlook and an uptick in milk prices are the basis for the forecast. Milk production in 2012 is forecast at 199.6 billion pounds, a reduction from Septemberâ€™s forecast.
Forecast production in 2013 was raised in October to 199.7 billion pounds based on the higher forecast yield per cow and a slower decline in cow numbers compared with earlier 2013 forecasts.
Source: The Dairy Site