The Mintec price of US milk rose by 45% to USD 365/MT in the seven-week period to 12th August 2020, due to increased domestic demand from strong supermarket sales.
The US Department of Agriculture’s (USDA) Augustraised the milk production forecast for 2020, while scaling back the large jump in milk prices projected in July 2020 Milk production for 2020 was forecast at 221.8 billion pounds, up 300 million pounds from July’s estimate, with higher expected growth in milk per cow expected to more-than offset lower dairy cow numbers. If realised, it would be up 1.5% from 2019’s total of 218.4 billion pounds.
Rising cases of COVID-19 in some states across the US and social distancing mandates had consumers rushing back to supermarkets during the third week of July. As a result, the value of weekly retail sales of dairy products was up 15.3% compared to the comparable week a year earlier. It marked the 20th consecutive week that grocery store dairy sales were double-digit higher than the year before.
However, as COVID-19 cases rise again it will cause uncertainty for the foodservice sector, which may see a fresh round of closures, resulting in a downward trend for milk prices.