—Lancaster Farming. Saturday. Nov. 16. 1974
46
Dairy Situation Outlook
Milk output may total
about 114 ft billion pounds
this year, around 1 percent
below 1973. The decline in
milk cow numbers has
slowed during 1974 partly
because of lower slaughter
cow prices and the lack of
viable alternatives for
dairymen. Output per cow
should average higher this
year, following the unusual
drop in 1973 for the first time
in almost 30 years.
September’s milk
production was up almost 3
percent from a year ago - the
sharpest year-to-year in
crease in almost a decade.
Reduced herd culling, in
creased availability of com
silage, and generally
favorable fall pastures in
several important dairy
States contributed to the
increase.
However, this kind of gain
seems temporary. High feed
costs in coming months will
likely cause daily farmers to
cut back on grain and con*
centrate feeding, thus
limiting output per cow
during the current barn
feeding season. In fact,
lower milk production ap
pears in prospect this winter,
although low slaughter cow
prices may prevent sharp
increases in dairy herd
culling. Production later
next year will depend in part
of 1975 crop developments
and subsequent feed prices,
on milk prices, and on the
market for cull dairy cows.
Although milk production
could be increasing in the
second half of next year,
total*lC7s output-may slightly
trail this year’s level.
Farm milk prices are now
rising seasonally, following
Sharper than normal
declines this spring and
summer. In October, far
mers averaged $8.21 per 100
pounds for milk up 64 cents
from July, but about 11 cents
under last October’s price.
Manufacturing milk prices
were about 26 cents over the
$6.57 support level in Oc
tober. Farm milk prices are
likely to be rising seasonally
during the rest of 1974 and
continue rising early next
year.
Gains in cash receipts
from dairying slowed ap
preciably in the third
quarter, while feed and other
production costs continued to
gain by about a fifth from a
%
year ago. For all of 1974,
dairy cast receipts should
total close to |9ft billion, up
from $B.l billion last year.
Wholesale butter and
cheese prices have
strengthened since midyear.
However, nonfat dry milk
prices still remain at CCC’s
support purchase price,
where they have been since
June.
September retail dairy
prices took a slight upturn
after dropping this summer
for the first month-to-month
declines in almost 2 years.
Fluid milk prices continued
to drop, but retail butter
prices rose in September.
Retail prices will likely be
rising seasonally during the
rest of 1974, but the gains are
not likely to match those of
last fall and winter.
More milk has moved into
manufacturing uses this
year because of lower fluid
milk sales. Larger third
quarter milk marketings
tunneled more milk in butter
and nonfat dry milk
production - with butter
output up a fourth from a
year earlier and nonfat dry
milk running about 40 per
cent more.
Commerical disap
pearance of milk in all dairy
products was down slightly
From the Beginning
L L
in January-September.
However, brisk butter sales
and some recovery in fluid
milk usage pulled third
quarter disappearance
slightly above year-earlier
levels. Commerical use may
remain close to year-earlier
levels in coming months.
Demand for dairy products
could be weakened by strong
inflationary pressures,
declining real consumer
purchasing power, and
higher unemployment rates.
However, dairy prices
probably will be rising more
slowly than last winter and
more slowly than food prices
generally. Gains in butter
sales and further strength
expected in fluid milk sales
help brighten the sales
picture. But sales of nonfat
dry milk continue to lag.
Home delivery sales of
fluid milk products in
Federal order markets had
dropped to 10 percent of total
sales in late 1973. Plastic
containers have been in
creasing rapidly at the ex
pense of both glass bottles
and paper packages. Use of
gallon size containers has
increased substantially to
the point where it about
equals sales made in half
gallon containers.
Although now declining
seasonally, commercial
dairy product stocks were
equivalent to 7.2 billion
pounds of milk on October 1,
up 60 percent from a year
ago, and a record high for
the date. Government stocks
of butter and American
cheese are at relatively low
levels. However, CCC nonfat
dry milk stocks reached
about 135 million pounds by
the end of October; a year
ago, CCC had no stocks.
USDA has purchased no
butter and only moderate
quantities of American
cheese under the price
support program since early
August, but non-fat milk
removals continue at sizable
levels.
January-September dairy
product imports were
equivalent to 2.3 billion
pounds of milk, up from 1.3
billion pounds a year earlier.
Almost all the increase
occurred during the first
quarter of the year, when an
increase in the import quota
for Cheddar cheese was
authorized. Since then, dairy
product imports have
slackened to more normal
levels. All of the temporary
increases in import quotas
had expired by midyear.
Vegetables
Agriculture Department re
ports indicate that this year’s
harvest of 360,150 acres of 14
major fresh vegetables represents
a 2% drop in yield from last
year
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