Report for May
The current extended period of milk production growth has so far been the weakest
of all such periods since 1996, but downward pressure on prices continues even
as inflation ebbs and consumer demand for dairy products recovers. Production of most major categories of dairy products mirrored this modest growth of milk production. Growth in total domestic consumption during this year’s first quarter kept pace with both milk production and milk solids production growth. Total export growth was positive during the quarter, compared to last year, which set a new calendar year record. The volume of milk solids imported into the country last December exceeded 4 percent of domestic production for the first time since 2016 but has since fallen back into the 3–3.5 percent range, typical for monthly import volumes since 1995.
Retail price inflation that hit dairy products hard during 2022 has been quickly unwinding in recent months, as measured by annual change in the various consumer price indices. The Dairy Margin Coverage margin
has approached $6/cwt in March, the lowest levels since the summer of 2021.
Read the full May report here