Milk lake in US?

After the first six months of 2002, US milk production has continued to outpace dairy product demand, resulting in a significant increase in stocks, the International Dairy Foods Association (IDFA) reports this week.

From January to June 2002, milk production continued to surpass 2001 figures and, in some cases, stocks have far exceeded levels seen in recent years for this time of year. Meanwhile, retail sales have not been strong enough to absorb current production, much less reduce stocks and tighten the overall dairy supply-demand situation, the IDFA​ continued.

Production estimates for the total United States are up 2.7 per cent from 2001. Much of this production growth occurred in the West. New Mexico's milk output is up 15.7 per cent from January to June 2001. Arizona (up 7.3 per cent), Idaho (6.2 per cent) and California (5.1 per cent) have also shown impressive growth in the first half of this year.

The dairy association added that demand for all dairy products has not kept pace with this production growth. According to the IDFA, since milk production began increasing in the fourth quarter of 2001, much of that milk has gone into building stocks of dairy products. By the beginning of this May, commercial stocks of dairy products were, in terms of milk equivalent-milkfat basis, 1.6 billion pounds ahead of 2001 stocks, despite greater retail sales of both fluid milk (up 0.2 per cent to May) and cheese (up 0.7 per cent through May 19).

In addition, the federal Commodity Credit Corporation (CCC) recently passed the mark of 1 billion pounds of non-fat dry milk (NFDM) in warehouses due to price support activity.