US and Oregon Dairy Industries Dr. Patrick D. French US Dairy Industry in 21 Value of milk production was $24.7 billion Dairy products represent 11% of all cash receipts for agriculture commodities 25% of total receipts from livestock products (NASS, 22) Oregon Dairy Industry in 21 Value of milk production was $266 million Economic impact of dairy industry was $6 million Dairy products are the 5 largest income generator for OR farmers Dairy products represent 8% of all cash receipts for agriculture commodities 31% of total receipts from livestock products (OASS, 22) 1
Livestock, Dairy and Poultry Poultry 6% Other 1% Equine 3% Milk 31% Cattle 5% (OASS, 22) Oregon Dairy Industry National Rankings (21) 1 th 18,833 pounds milk per cow 23 th - 1.7 bil pounds milk per year 26 th - 9, cows April - June Rankings (22) 12 th 4,861 pounds milk per cow 17 th - 559 mil pounds 21 th - 115, cows (NASS, 22) Cows and Production US (1, head) 3 25 Cows Milk 2 15 1 5 1924 1936 1948 196 1972 1984 1996 2 15 1 5 Milk (lb/cow) 2
Total Milk Production mil lbs 18 16 14 12 1 8 6 4 2 1924 1936 1948 196 1972 1984 1996 Cow Numbers US (1, head) 13 12 11 1 9 8 US OR 921 US -24% OR -7% 9 7 8 9 92 94 96 98 ' 13 12 11 1 9 8 OR (1, head) (NASS, 21) Milk Production per Cow lbs/cow 2 18 16 14 12 1 OR U.S. 18222 1821 US +87% OR +82% 7 75 8 85 9 91 92 93 94 95 96 97 98 99 ' '1 (NASS, 21) 3
Total Milk Production US (mil lbs) 18 16 14 12 1 8 US +43% US OR OR +69% 7 8 9 92 94 96 98 ' 18 16 14 12 1 8 OR (mil lbs) (NASS, 21) Milk Cows (21) 15 12 Head (1,) 9 6 3 WI NY PA 9 OR MN TX ID MI OH NM (NASS, 22) Top Cow States (21) 17% Other 48% WI 15% MN 6% PA 7% NY 7% (NASS, 22) 4
Cows per Herd 15 12 Head/Herd 9 6 3 23 133 NM AZ FL ID CO WA TX OR GA US (NASS, 22) Milk Cows by County (2) Other 6% Tillamook 18% Marion 11% Polk 3% Morrow 4% Linn 4% (OASS, 21) Change in Cow Numbers % (1 vs 91) 175 15 125 1 75 5 25-25 -5-1 TN AR ND MS OR AZ ID NM (NASS, 2) 5
Change in Cow Numbers 1, Head ( vs 9) 4 3 2 1-1 -2-3 -4-1 WI MN TN OH OR AZ NM ID (NASS, 21) Change in Cow Numbers % ( vs 95) 14 12 1 8 6 4 2-2 -4-3 AR MS NJ ND OR AZ NM ID (NASS, 2) Change in Cow Numbers 2 1, Head ( vs 95) 15 1 5-5 -1-15 -3 WI TX MN MO OR AZ NM ID (NASS, 21) 6
Milk Production (21) 35 3 25 mil lbs 2 15 1 5 164 WI NY PA MN ID TX MI WA NM OR (NASS, 22) Top Milk Producing States (21) 19% Other 53% WI 14% PA 7% NY 7% (NASS, 22) Milk Production per Cow (21) 25 2 18222 lbs/cow/yr 15 1 5 WA AZ CO NM ID NV MI IA OR (NASS, 22) 7
Change in Milk Production/Cow lbs ( vs 9) 45 4 35 3 25 2 15 1 5 1632 LA AR DE WY OR MT KS CO ID (NASS, 22) Cheese Production by Type Oth Italian 8% Cream 8% Swiss 3% Other 5% Cheddar 34% Oth American 9% Mozzarella 33% Cheese Production 25 2 mil lbs 15 1 5 WI 96 97 98 99 ' '1 8
Butter Production mil lbs 4 35 3 25 2 15 1 5 96 97 98 99 ' '1 WI Non-fat Dry Milk 7 6 5 mil lbs 4 3 2 1 WA 96 97 98 99 ' '1 Mailbox Milk Price $/cwt 17 15 13 11 9 7 5 3 1 OR U.S. VA 95 96 97 98 99 ' '1 (AMS, 21) 9
$/cwt Class III Price 2 18 16 Class III Support 14 12 1 8 6 4 2 78 8 82 84 86 88 9 92 94 96 98 ' '2 (AMS, 2) US Milk Price $/cwt 18 16 14 12 1 8 6 4 2 Avg. from 198 to 1999 = $13.28/cwt 7 72 74 76 78 8 82 84 86 88 9 92 94 96 98 ' (AMS, 2) Milk Price by Month 2 18 1995 1996 1997 1998 1999 2 Avg 16 14 12 $/cwt 1 8 6 4 2 Jan. Feb. Mar. Apr. May June Jul. Aug. Sep. Oct. Nov. Dec. (AMS, 21) 1
CCC Milk Equivalent Purchases CCC Purchase (mil lbs) 18 16 14 12 1 8 6 4 2 CCC Class III Support 78 8 82 84 86 88 9 92 94 96 98 ' 16 14 12 1 8 6 4 2 $/cwt Feed Prices 3 25 Alfalfa Corn 44% SBM 2 15 1 5 75 77 79 81 83 85 87 89 91 93 95 97 99 (AMS, 2) How much should prices increase? Average annual inflation rate since 1975 has been 4.85% 1975 prices Alfalfa = $52/ton Corn = $99/ton 44% SBM = $144/ton Milk = 8.78/cwt 11
US Inflation Rate % 16 14 12 1 8 6 4 2 75 77 79 81 83 85 87 89 91 93 95 97 99 1999 prices were Alfalfa = $77/ton Corn = $68/ton 44% SBM = $135/ton Milk = 14.38/cwt 1999 should have been Alfalfa = $179/ton Corn = $281/ton 44% SBM = $57/ton Milk = 3/cwt Milk Production Costs Heartland N. Crescent Prairie Gateway Eastern Uplands S. Seaboard Fruitful Rim US Economic Research Service (21) Cash Expenses 1.95 9.7 1.48 13.7 1.35 8.91 9.58 Economic Costs $/cwt 22.96 2.58 13.88 25.88 18.34 13.94 18.5 Milk Price 17.9 17.83 16.85 18.49 19.69 15.87 17.22 12
U.S. and World Trade (1999) Butter 1.3 billion pounds produced (2nd to India).3% exported (16th world rank) Cheese 7.9 billion pounds produced (1st) 1.1% exported (9th) Non-Fat Dry Milk 1.4 billion pounds produced (1st) 35% exported (2nd) (FAS, 2) US Cheese Production Consumption Imports Exports 1 8 bil lbs 6 4 2 (FAS, 2) US Butter Production Consumption Imports Exports 1.4 1.2 1 bil lbs.8.6.4.2 (FAS, 2) 13
US Nonfat Dry Milk Production Consumption Imports Exports 1.4 1.2 1 bil lbs.8.6.4.2 (FAS, 2) Top Cheese Producing Countries bil lbs 9 8 7 6 5 4 3 2 1 Netherlands Italy Germany France United States (FAS, 2) Top Cheese Exporting Countries mil lbs 9 8 7 6 5 4 3 2 1 Germany Denmark France Australia New Zealand (FAS, 2) 14
U.S. and World Trade Cheese trading deficit of 345 million pounds in 1999 Cheese consumption exceeded production by 242 million pounds in 1999 2.4 billion pounds of milk needed Milk Cows Top Countries 1, Head 4 35 3 25 2 15 1 5 Mexico US Russia Brazil India (FAS, 2) Milk Production Top Countries lb/cow/year 2 18 16 14 12 1 8 6 4 2 Denmark UK Sweden US Japan (FAS, 2) 15
Per Capita Consumption lbs Fluid Milk 3 35 Fluid Butter Cheese 25 3 2 25 15 Fluid -.8%/yr 2 Butter -.3%/yr 15 1 Cheese +3.2%/yr 1 5 5 7 72 74 76 78 8 82 84 86 88 9 92 94 96 98 ' lbs Butter/Cheese (FAS, 2) Future of Milk Production Production/cow increasing.8%/year US population = 272 bil (increasing 1%/yr) Scenario 1 Consumption stabilizes 247, more cows in 21 Scenario 2 Consumption trend continues 811, more cows in 21 Consumption vs Life Expectancy Japan Australia France Sweden Spain Greece Life Expectancy (yr) 75.4 73.2 73.1 73. 72.8 72.5 Butter/Cheese (lbs/yr) 5.4 3.7 7.2 38.2 14. 56.5 (WHO, 2) 16