Discounted loads of spot milk in the Upper Midwest have been reported by USDA’s Dairy Market News. But do the discounted loads and year-over-year milk production gains signal a milk surplus? Not necessarily. The U.S. milk supply is less burdensome than discounted loads suggest. USDA Milk Production report data shows a 1% year-over-year growth.
While this suggests a slow growth rate, regional dynamics continue to spur expansion toward middle America and away from the coasts. South Dakota increased milk production 23% from 2021 to present and produced an additional 80 million pounds in March 2023 compared to the same time in 2021. Texas produced an additional 153 million pounds and has invested in plant expansions and new processing capacities.
While discounted milk could be worrisome, issues appear to localized and isolated.
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