New figures released by the National Ag. Statistics Service (NASS) show February milk production in the 20 major US States to have been up 1.7% from February 2003, totaling 11.8 billion lbs, however, after adjusting production for the additional day due to the leap year, in fact February milk production was down 1.8% on a per day basis. Expressed on a per cow basis, February 2004 production levels were up slightly over February 2003 with an average output per cow in the 20 major States of 1,531 pounds for an increase of 42 pounds over the previous year as reported by the NASS. The number of milk cows on farms in the 20 major States was estimated at 7.72 million head a decrease of 91,000 from February 2003, but an increase over the January 2004 total by 4,000 head. Texas, Idaho, New Mexico and Michigan are the only top-20 States that had higher per day production than a year ago, while Pennsylvania, Kentucky, Missouri, Virginia, Iowa, Illinois and New York all showed declines in excess of 5% compared to 2003.

The net result is a strong upward price surge for milk in the he US, propelled by both cheese and butter markets. The Class III price for milk in February averaged just under $12.00 – more than $2.25 higher than a year ago. Current daily cash cheese prices are the highest they’ve been since late 1999 and they’ve never been this high before in March. Traders continue to raise prices in the hope of securing cheese as demand exceeds supply. According to USDA’s weekly market report many plant operators are reporting full commitments on expected production for extended periods and some orders have been delayed due to lower than expected milk receipts. Plant operators continue to seek supplemental milk supplies to purchase, but with limited success. Most plants continue to operate on lighter than desired schedules due to the limited supply.

The cash price for butter has also made huge gains, with an increase of more than 80 cents since the first of the year breaking records for this time of the year. According to USDA reports many butter producers and handlers question milk and cream availability during upcoming months and feel that volumes will be lighter than desired. At this point, many butter producers continue to look for additional volumes of cream, but are finding offerings to be limited. With prices approaching $2.20 per pound the question becomes at what price will demand begin to subside? In the meantime, it’s wonderful news for producers who are still recovering from the disastrous market conditions in 2003.

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