More Milk Traveling Farther for Processing

June 18, 2015 07:48 AM
More Milk Traveling Farther for Processing

By Fran Howard

Consolidation within the U.S. dairy industry means more milk is traveling farther for processing, and a recently released USDA report confirms that. USDA’s analysis of 2013 producer milk marketed in the Federal Milk Marketing Orders shows just how much moved throughout the orders and how it moved within the system in 2013.

“Not surprisingly, nearly all states (47) marketed milk in a Federal Order during 2013. However, the amount of milk marketed varied considerably, with 42 states marketing over 98 percent of their milk in a Federal Order,” notes Sara Dorland, analyst with the Daily Dairy Report and managing partner at Ceres Dairy Risk Management, Seattle

Just four states—California, Idaho, Montana, and Utah—marketed very little milk in the federal system, according to the report.

The number of states marketing milk in each Federal Order ranged from a high of 26 states in the Southeast Order to a low of just three states in the Arizona Order.

Milk movement in 2013 was also quite different than it was in 2003.

“For instance, producer milk from Tennessee was marketed in three orders in 2003, but in 2013 Tennessee milk was processed in six orders ,” says Dorland. “Conversely, Nevada producer milk was not marketed in the Federal Order system in 2013, but it was in 2003. Overall, however, more producer milk appears to be traveling in 2013 than it did just 10 years prior.”

Of all states, Indiana exported milk to the greatest number of Federal Orders in 2013, according to the report. “Indiana produced 3.38 billion pounds of milk in 2013, but only 53.2 percent, or 2.04 billion pounds, was marketed the Mideast Order, its home order,” says Dorland. “Indiana producer milk was marketed in seven federal orders in 2013.”

The Appalachian Order accounted for 24.2 percent of Indiana’s total production, followed by the Southeast (13.7%) and Upper Midwest (1.6%) orders. Indiana producer milk was also shipped to four other orders, but USDA did not break out the data, she says.

“Texas producers, however, shipped the largest quantity of milk to other orders in 2013,” notes Dorland. “Texas produced 9.6 billion pounds of milk, and handlers marketed that milk in five orders. More than two-thirds, or 68 percent, of Texas’ milk was marketed in its home order, the Southwest Order.”

Another 13.6 percent of Texas’ milk headed to the Central Order, and then into the Mideast (11.5%) and Appalachian (1.1%) orders.

“Likely surplus milk in Indiana, Texas, and similar locales was shipped to other orders to either service a deficit market or to find processing capacity,” says Dorland.

The nation’s second largest milk-producing state of Wisconsin, however, was number one in terms of total milk marketed throughout the Federal Orders. All told, Wisconsin produced nearly 27.6 billion pounds of milk in 2013, and 24.8 billion pounds was utilized in the Federal Order system.

Wisconsin accounted for nearly 19 percent of all milk marketed in Federal Orders in 2013, notes Dorland, and 84 percent of the state’s milk was marketed at home in the Upper Midwest Order, where it was likely used in cheese production based on high Class III utilization in the state, says Dorland.

Looking at the number-one milk-producing state of California, just 0.5 percent of the state’s milk found its way to three federal orders in 2013.“In all likelihood, more California milk was shipped overseas than marketed in Federal Orders in 2013,” says Dorland. 

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Spell Check

Newport, TN
6/18/2015 03:53 PM

  Thanks very much for this interesting analysis.


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