For the first time since the beginning of the year, the third quarter saw positive yearly growth in the total domestic consumption of milk in all products. This favourable outcome was largely a result of increased use of all cheese. The third quarter saw a slight slowdown in U.S. dairy export volumes from the second quarter’s record pace, but the sector was still on track to virtually certainly break another calendar year record. Through the third quarter of 2018, performance increased greatly from the previous record-breaking 17.3 percent calendar year recorded in 2021 to 18 percent of the total milk solids produced in the United States.
After many months of below-year-ago levels, the U.S. dairy industry has finally clearly started to increase milk production. Despite this increased supply, dairy product prices stabilised and in some cases rose in October after declining in recent months. Retail price inflation for all products, the food and beverage categories, dairy products, and the majority of specific dairy products all slowed in October compared to the previous month. For Tier 1 coverage at the $9.50/cwt level, the Dairy Margin Coverage programme provided a second payout of $0.88/cwt in September for 2022. According to the USDA’s dairy outlook and the CME Group’s dairy futures, milk prices will be roughly $2.50 to $3.00 per hundredweight lower in 2023 than they are now.
