BERRIEN SPRINGS — Too much milk, not enough consumption.
The simple law of economics, supply and demand, explains why dairy farms nationwide, including the one at Andrews University, have been going out of business in recent years. But fewer dairy farms hasn’t meant less milk.
The number of licensed dairy herds in Michigan declined from 2,440 in 2007 to 1,750 in 2017, according to Allison Stuby Miller, Michigan Milk Producers Association communications manager. The MMPA markets milk on behalf of its members, which included the Andrews dairy farm.
In Michigan, the U.S. Department of Agriculture National Agricultural Statistics Service (NASS) reported that there were 328,000 dairy cows in 2007. In 2017, 425,000 were reported, which means the average number of cows per farm has increased in the past decade.
An online Dairy Herd Management article from April 24, 2018, reported that prices peaked in 2014, with high demand worldwide and the number of cows producing milk being relatively low.
However, that encouraged more production. Milk prices in 2014 averaged $23.16 per 100 pounds (cwt).
A U.S. Department of Agriculture Economic Research Service report dated Dec. 18 forecast the 2018 milk price will average $16.15-$16.25 per cwt. For 2019, the ERS predicts $16.70-$17.80.
A Capital Press report on the University of Idaho annual dairy outlook seminar, published Dec. 13, said that while cow numbers are dropping nationwide due to financial pressure, average production per cow is increasing for various reasons.
The result is that milk production has slowed, but is still increasing.
In 2007, there were 9.16 million cows in the United States, which produced 186 billion pounds of milk, according to NASS. In 2017, 9.39 million cows produced 215 billion pounds.
Prices may be improving for dairy farmers, but slowly. In a Dec. 5 Dairy Herd Management article, Brian Rice of Rice Dairy, a dairy brokerage firm, forecast milk prices this year might average $1 higher than in 2018.
Rice predicted “that prices will hit $20 (per cwt.) within the next five years.”
But even if that figure is reached, that would still be well below the high in 2014.