US milk production fell 0.3% YOY in December according to the USDA, mostly reflecting a continued decline in the dairy herd. December average yield per cow was up 0.1% YOY while cow numbers were down 0.4%. At 9,357m, December cow numbers were down 1,000 head on the prior month and 39,000 head below the same month in 2022. This time, downward revisions were made back to July 2023. The national dairy herd peaked in March and has declined by 87,000 head since.

Among major producing states, December milk production in Wisconsin rose  0.5% YOY while California intake was down 1% YOY. Milk production in South Dakota, New York, Michigan, Ohio, Indiana, Arizona and Florida continued to improve. In contrast, supplies continued to decline in New Mexico, Texas, Colorado and Oregon. At the regional level, we estimate Upper Midwest supplies rose 1.1% YOY while Desert states were down 2.6% YOY.