Falling Milk Production Masks U.S. Dairy Industry’s Growth Potential
The U.S. dairy industry has long relied on monthly milk production data from the USDA to track the trajectory of milk supplies available for processing and to project potential dairy product output. Historically, falling milk production from dairy farms would signal a decline in supplies of both fluid milk and the key solid milk components used to produce cheese, butter and other dairy foods. Production volumes of farmgate milk and the components in that milk trended closely together for decades. As a market indicator, tightening milk supplies could potentially curtail dairy processors’ growth or expansion plans.
