America’s dairy cows put plenty of milk in the tank in January, thanks to milder weather and an increase in numbers. The USDA’s preliminary data shows January output at 19.3 billion pounds, up 1.3 percent from January 2022. The 24-state total, at 18.5 billion pounds, was up 1.5 percent.

Revisions lowered the 50-State December total by 30 million pounds to 18.9 billion, up 0.6 percent from a year ago, instead of the 0.8 percent increase originally reported.

Cow numbers totaled 9.4 million, up 9,000 head from the December count, which was revised 4,000 head lower. The January herd was up 38,000 head from a year ago and the largest since October 2022. The 24-state head count was up 9,000 from December and 51,000 above a year ago, also the largest since October.

Output per cow averaged 2,052 pounds, up 18 pounds or 0.9 percent from January 2021. The December output per cow was revised 2 pounds lower.

Output for all of 2022 was reported at 226.5 billion pounds, up just under 0.1 percent from 2021, but up 12.5 percent from 2013. Cow numbers, at 9.40 million, were down 0.5 percent from 2021 but 1.9 percent above those in 2013. Output per cow averaged 24,087 pounds in 2022, up 139 pounds from 2021 or 0.6 percent, and up 10.4 percent from 2013.

Matt Gould, former analyst and editor of the “Dairy and Food Market Analyst” and now editor of “The Weekly Wire,” asked in the Feb. 27 “Dairy Radio Now” broadcast if the report was a new data point or the beginning of a new trend.

Gould said he had predicted a 1.8 percent increase in December, but it turned out to be just 0.8 percent and “appeared to be a real downshift of the U.S. milk production growth trend.” The 1.3 percent increase in January is against a very weak comparable last year, he said, and while “We are seeing milk production growth, it is by no means a wall of milk out there. We are seeing a downshift in the marketplace.”

Tough times on the farm have increased dairy cow culling. The USDA’s latest Livestock Slaughter report shows an estimated 297,900 head were sent to slaughter under federal inspection in January, up 31,600 head from December, and 37,100 or 14.2 percent above January 2022.

The week ending Feb. 11 saw 67,400 head go to slaughter, down 2,600 from a year ago, first time it was below a year ago since the week ending Dec. 3, 2022. Year to date however, 406,000 cows had been sent to slaughter in 2023, up 21,500 head or 5.6 percent, from the same period in 2022.

Direction reversed in the Feb. 21 Global Dairy Trade where the weighted average fell 1.5 percent, after jumping 3.2 percent on Feb. 7.

Anhydrous milkfat led the declines, down 2.6 percent, after jumping 4.8 percent on Feb. 7, however butter was up 3.8 percent, following a 6.6 percent advance on Feb. 7. Skim milk powder was down 2.4 percent, after holding steady last time, and whole milk powder was down 2.0 percent, following a 3.8 percent rise. Cheddar was up 1.5 percent, after a 2.3 percent gain.

StoneX Dairy Group says the GDT 80 percent butterfat butter price equates to $2.1782 per pound U.S., up 7.8 cents, after gaining 13.1 cents on Feb. 7, and compares to CME butter which closed Friday at a pricey $2.43. GDT Cheddar, at $2.3068, was up 4.8 cents, and compares to Friday’s CME block Cheddar at a bargain $1.88. GDT skim milk powder averaged $1.2559 per pound, down from $1.2834, and whole milk powder averaged $1.4806 per pound, down from $1.5101. CME Grade A nonfat dry milk closed Friday at $1.2150 per pound.

With less volume available for purchase, many region’s purchases were lower than they were in the last GDT, says StoneX’s Dustin Winston. “However, North Asian purchases, which includes China, were higher than both the last event and last year as the region continues to stay above 50 percent market share after their return to that market at the start of February.”

Cooperatives Working Together (CWT) member cooperatives accepted 10 offers of export assistance this week from CWT that helped capture sales contracts for 2.0 million pounds of American-type cheese. The cheese is going to customers in Asia and Oceania from March through August.

U.S. dairy margins were relatively flat over the first half of February with limited price movement in the milk and feed markets, according to the latest Margin Watch (MW) from Chicago-based Commodity and Ingredient Hedging LLC.

“While milk price changes have been limited,” the MW said, “There has been some discrepancy between classes as Class III has been moving lower while Class IV prices have been increasing and are up around $1.00 per cwt. since the beginning of the month. The rebound in spot butter helped support Class IV milk, with cash butter up 15.25 cents since the end of January. Block and barrel cheese prices have been moving sideways to offer limited direction to Class III. The recent weakness in milk prices combined with sky-high feed costs continue to crimp spot margins. This has led to increased dairy cow slaughter.

The March Federal order Class I base milk price was announced at $18.99 per hundredweight, down $1.79 from February and $3.89 below March 2022, lowest Class I since Nov. 2021. It equates to $1.63 per gallon, down from $1.97 a year ago. The three-month Class I base average stands at $20.73, down from $21.41 a year ago, and compares to $15.29 in 2021.

Speaking of fluid milk, U.S. sales did not improve the last month of 2022. The Agriculture Department’s latest data shows December packaged fluid products totaled 3.8 billion pounds, down 3.7 percent from December 2021.

Conventional product sales totaled 3.5 billion pounds, down 3.3 percent from a year ago. Organic products, at 230 million pounds, were down a hefty 9.4 percent, but represented a typical 6.1 percent of total sales for the month.

Whole milk sales totaled 1.3 billion pounds, up 0.4 percent from a year ago, up 1.3 percent year to date, and represented 34.2 percent of total milk sales for 2022.

Total packaged fluid sales for 2022 amounted to 43.3 billion pounds, down 2.4 percent from 2021. Conventional product sales totaled 40.4 billion pounds, down 2.4 percent. Organic products, at 2.8 billion, were down 2.0 percent, and represented 6.6% of total 2022 sales.