US milk production fell 0.5% YOY in July according to the USDA, reflecting much lower producer margins and a continuing decline in the dairy herd. In YOY terms, July yield per cow fell 0.4% YOY on average, while cow numbers were down 0.1%. At 9,400m, July cow numbers were down 3,000 head from the prior month and 13,000 head below the same month in 2022. This time, the government revised historical dairy herd data and “lost” 5,000 cows in June. Including these revisions, the national dairy herd peaked in March and has declined by 44,000 head since, with strong cow culling reported in recent weeks.

Among major producing states, July milk production in Wisconsin rose 0.9% YOY and California was down 5.5%. Milk production in Idaho, South Dakota, Iowa, New York, Michigan, Ohio, Minnesota and Indiana continued to improve. Supplies continued to decline in New Mexico (-9.1% YOY) and Texas (-4.3% YOY). At the regional level, we estimate Upper Midwest supplies rose 1.9% YOY while Desert states were down 3.9% YOY.