December Milk Production & GDT Results February 20, 2019
Due to the government shutdown that began December 22nd, 2018 and ended January 25th, 2019, the scheduled December milk production report was delayed. Today, December numbers were finally released and presented year over year milk production growth of 0.5%. Cow numbers totaled 9.351 million head, down 49,000 from last December. Adjustments were made to October and November data. October declined 2,000 head to 9.366 million and November lost 6,000 cows from the previous report. In total, cow numbers are down 16,000 since September and 53,000 from our peak in May 2018, respectively. Milk per cow gained 21 pounds year over year to 1,942. Total milk production in December 2018 was reported at 18.155 billion. For 2018, 217.476 billion pounds were produced - 0.9% over 2017. See below.
Event 230 of the Global Dairy Trade (GDT) took place on Tuesday with the overall index gaining 0.9% to an average price of $3,271/metric ton. All products made available at Tuesday's auction were higher with the lone exception of lactose which lost 2.9%. Product results to note included cheddar outpacing all others and up 2.9% at $1.663/lb. Butter added 1.2% to $1.988/lb. Skim milk powder strengthened 2.8% at $1.17/lb while whole milk powder was up 0.3% at $1.37/lb, respectively. This marks the sixth straight GDT event with higher results dating back to December 4th, 2018. See below for a full view of the results.
Also released on Tuesday was January 2019 milk production data for New Zealand. As expected, milk production results far outpace year ago levels. 2,471,000 metric tons (5.5 billion pounds) were produced in January, 7.72% ahead of the 2017/18 dairy season. See below. On a milk solids basis January 2019 was 7.132% above last year.
While cow numbers are falling in the USDA's milk production reports, milk production continues to flow domestically and in New Zealand. Including the other two big dairy producing regions of the EU-28 and Australia, year over year production is slightly lower. This is the first time since December 2016 that we have seen declines out of the top four year over year. Despite smaller production for the top four collectively, risk is very much real in our markets. February - June trade & settlements have proven this over the past four years. Give us a call to sort through strategies suitable for your operation. As a side note, the January milk production report will be released on March 12th while the February report is scheduled for March 19th.