Eoin Kelly, Business Analyst, Bord Bia-Irish Food Board

US dairy production is set to increase by less than 1% this year with a further small rise in production forecast next year according to the latest United States Department of Agriculture Livestock, Dairy, and Poultry Outlook report published recently.

The US dairy herd is forecast to total 9.32 million cows this year showing a very slight increase on 2015 levels with little change forecast for 2017. Output per cow is predicted to rise by almost 2% this year reaching 22,795 pounds (over 10,000 kgs) per cow. This increase is expected to continue in the short term with preliminary forecasts for 2017 pointing towards a 3% rise.

Feed costs have decreased year on year as a result of favourable weather conditions and ultimately increased yields for most crops. Lower feed costs coupled with improved weather and higher output per cow has seen overall milk production rise. For 2015 total US milk production is expected to increase, reaching over 212 billion pounds (96.4 million tonnes) with a further increase forecast in 2017.

Looking at imports, for the first quarter of the year on a skim solids milk equivalent, imports reached its highest level since the first quarter of 2009. On a milk fats basis imports for the first quarter of the year were at their highest levels since the second quarter of 2004.

Looking at exports, a decline in exports on a milk fat basis is forecast for the full year 2016 however this has been offset somewhat by lower exports of cheese and butterfat products. Preliminary estimates for 2017 are pointing towards some further decline in exports on a milk fats basis while on a skim solids basis little change is expected.

Domestic demand is expected to grow for the full year 2016 with a 4% increase in consumption of products on a milk fats basis expected with a further rise in 2017 albeit at a slower rate. Similarly, looking at a skim solids basis a 3% rise in consumption is anticipated for the full year 2016 with a lower rate of growth predicted for 2017.

Overall US dairy production in the short term is set to be characterised by an increase in production, higher domestic demand and increased exports.

For more information and for access to the full report please click here