Cow numbers in the US have hit their lowest levels in five years. The numbers on 1 January dropped to 9.357m or 41,000 below the figure for 2023.

And the contraction in the herd continued through January, with the latest report from Rabobank indicating that numbers fell by a further 23,000 head through the month to hit levels not seen since 2019.

Additionally, there were about 14,000 fewer dairy replacement heifers in the herd, which will limit the potential for substantial herd growth this year.

Despite the drop in cow numbers, Rabobank is forecasting 0.5% growth in milk output in the US this year, while the United States Department of Agriculture (USDA) is predicting a 0.7% lift in output.

Positive projections

The positive projections from Rabobank are based on a recovery in milk output per cow.

US milk output per cow has been weak recently, falling by 0.3% in January. Yield was up just 0.1% in 2023, well below the long-term average of 1% growth.

In terms of processing, cheese production is expected to grow in 2024, but powder production will be curtailed.

Dairy exports from the US were 7% back in 2023 compared with 2022 and Rabobank predicts that volumes are unlikely to recover in 2024.

“Rabobank expects exports will trend similarly versus the prior year’s levels, with volume again struggling to outpace 2022’s record high as global demand remains softer throughout the next several months,” the bank predicts in its quarterly review of Q1.

Argentina difficulties

Meanwhile, Argentina must take the gong for the most difficult country for dairy farmers at the moment.

Rabobank has predicted that a 2% drop in milk output in 2023 will be compounded by an 8% fall-off in Q1 of 2024.

“Argentina’s dairy industry is in a painful transition period,” Rabobank notes.

A collapse in the value of the Argentine peso has resulted in soaring input prices, which have totally eroded increased farmgate returns.