MilkPrice: Milk Production - Some States are Growing, and Some are Shrinking.

As covered in the prior post, milk production in 2021 has slowed down (Chart I). In early 2021 there was continued steady growth of milk production, but in the last half of 2021, production has leveled out. This post will examine milk production by state. Some states are growing, and some are shrinking. Data in this post is based on the years 2018 to 2021 through November. Much of the analysis is based on 12-month moving averages used to reduce volatility and seasonal changes, allowing a better perspective of long-term trends.

Chart I - Total U.S. Milk Production

Table I below lists the 10 largest milk producing states. The 10 states listed below produced 74 Percent of the U.S. milk in 2021.

Table I - The 10 Largest Milk Producing States

The three largest milk producing states, California, Wisconsin, and Idaho, account for 40 percent of the milk produced in the U.S. Adding New York, and Texas, the top five states account for over 53 percent of the U.S. milk. Milk production and use in the three largest states will be reviewed in more detail below. The final part of this blog post will review the three-year growth statistics and the 2021 growth and shrinkage statistics of milk production by the fastest growing and fastest shrinking states.

CALIFORNIA

California is by far the largest milk producing state in the U.S. California had a sudden flattening of milk production starting in mid 2021. California fluid milk consumption has been decreasing, some cheese production has left California, and butter production is currently limited by logistics and the milk supply.

Chart I - California Milk production

California cheese production (Chart II) began dropping in 2020 and has somewhat leveled off in 2021. With less cheese production, there is less milk needed. Between the end of 2019 and November 2021, cheese production has dropped by four percent. See this recent post for more details on cheese production.

Chart II - California Cheese Production

Fluid milk sales (Chart III) were robust in California in 2019 but began dropping in 2020. The decrease in fluid milk sales has continued in 2021 also decreasing the need for producer milk. Between the peak at the end of 2019 and November 2021, fluid milk sales have decreased by nine percent.

Chart III - California Fluid Milk Sales

Butter production is a major factor in California. (See this recent post on butter production for details.) Butter production grew in 2020 but leveled off in 2021. There have been very few increases in butter production in California throughout 2021. The losses in fluid milk and cheese should make more milk available for increases in butter production. To date, this has not happened.

Chart IV - California Butter Production

WISCONSIN

Wisconsin milk production has grown by nearly four percent between late 2020 and November 2021.

Chart V - Wisconsin Milk Production

Wisconsin cheese production (Chart VI) and Wisconsin milk production (Chart V) are very similar, and they should be as the vast majority of Wisconsin milk is used for cheese. Milk production grew by four percent and cheese production grew by three percent. This should leave sufficient milk for cheese production as consumption of cheese continues to grow.

Chart VI - Wisconsin Cheese Production

Fluid milk sales make up most of the remaining use of milk in Wisconsin. Fluid milk sales are not reported specifically for Wisconsin, but likely follow the trends shown in Chart VII for the Upper Midwest region. Sales of fluid milk in the Upper Midwest are falling at the rate of about three percent annually.

Chart VII - Upper Midwest Fluid Milk Sales

IDAHO

Idaho has seen a healthy growth in milk production of about 2.5 percent annually over the last three years. However, the growth has slowed down somewhat in 2021. Idaho is not in a Federal Milk Marketing Order and therefore some data is not publicly available.

Chart VIII - Idaho Milk Production

Cheese production in Idaho (Chart IX) increased by 2.5 percent between the start of 2019 and April of 2021. However, starting in May of 2021 cheese production fell by over one percent leaving a three-year gain of only one percent. Idaho is also home to production of a variety of milk powders.

Chart IX - Idaho Cheese Production

Table II below lists the 10 largest states by the size of their increase in milk production from 2018 to 2021. The four states with the most growth, Texas, California, Idaho, and Wisconsin respectively, make up 62 percent of the overall increase in the last three years. Texas has sustained the largest growth in pounds and has increased milk production by 20.8 percent over three years. As covered in this and other posts, Texas is rising as a major dairy producing state and will likely pass New York to soon become the fourth largest dairy state.

In terms of growth percent, Georgia really stands out. States in three of the four Federal Orders paid on the Advanced system have had significant decreases in milk production as they are very dependent on fluid milk sales that are declining. Georgia, part of the Southeast Federal Order, had a 43.7 percent growth over three years. The state has emphasized improved productivity by various programs. The growth rate of Georgia milk has slowed to just one percent in 2021, but that is still much better than the decreases in fluid milk consumption.

Table II - The Ten States with the Largest Gain in
Milk Production from 2018 to 2021 YTD.

Table III lists the most recent growth from 2020 to 2021. Wisconsin, Texas, and California remain at the top of the list. South Dakota had a very significant increase of 14.7 percent with the expansion and addition of cheese plants. Georgia dropped out of the top ten in 2021 with only a one percent increase.