US milk production increased 4% YOY in September according to the USDA, following a 3.4% YOY increase in August. The September growth was well above pre-report expectations, influenced by upward revisions in dairy cow numbers for August (+21,000 head).

Dairy cow numbers rose by 40,000 head from the prior month, which led to a +2.4% YOY increase or 228,000 head. It’s the biggest monthly gain in the national herd since data began in 1998. The US dairy herd now stands at 9.581m head, marking a new +30-year high. Idaho, Texas, New York and Kansas combined accounted for 57% of the national milk output growth in September. Milk supplies in Washington continued to decline in YOY terms.

US milk solids rose an estimated 5.8% YOY, or 1.8% YOY above the increase in milk volume in September. The estimate is based on the trend differentials between milk volumes and milk components and consideration of weather and margins.