US milk production fell 0.2% YOY in August according to the USDA, reflecting much lower producer margins and a continuing decline in the dairy herd. August average yield per cow was flat YOY while cow numbers were down 0.2%. At 9,390m, August cow numbers were flat on the prior month and 16,000 head below the same month in 2022. This time, the government revised historical dairy herd data and “lost” 10,000 cows in July. Including these revisions, the national dairy herd peaked in March and has declined by 54,000 since, with strong cow culling data reported.

Among major producing states, August milk production in Wisconsin rose by 1.2% YOY and California was down 3.7% YOY. Milk production in Idaho, South Dakota, Iowa, New York, Michigan, Ohio and Indiana continued to improve. Milk production was down 8% YOY in New Mexico and 3.2% YOY in Texas. At the regional level, we estimate the Upper Midwest supplies rose 1.6% YOY while Desert states were down 3.6% YOY.