(Following are excerpts from the May 19 Dairy and Situation Outlook Report compiled by Profssor Emeritus Robert Cropp). Compared to April a year ago, milk production was down 86 million pounds for the top 5 dairy states that account for about 52% of U.S. milk production. A major share of this decline was due to California reducing cow numbers 24,000 head or 1.3% and milk per cow 1.0% lower resulting in a decline in milk production of 82 million pounds or 2.3%. While Idaho had 1.3% more cows, 2.7% less milk per cow resulted in 15 million pounds less milk or 1.5%. Milk production was down 0.5% and 1.9% respectively for New York and Pennsylvania for total of 21 million pounds. But, Wisconsin was the exception for the 5 states with 0.4% more cows and 1.2% more milk per cow resulting in 33 million more pounds of milk or an increase of 1.6%.

While cheese and milk prices should show some improvement this summer and will continue to strengthen as the year progresses, there’s disagreement as to how much they’ll improve. Milk production needs to fall below year-ago levels before milk prices will show significant increases. The reason is slower domestic sales and the big decline in dairy exports. Until prices improve financial stress on dairy farmers will continue.

The full dairy situation and outlook report is available at http://future.aae.wisc.edu/outlook/cropp_May_09.pdf.