US dairy production is set to increase by over 2% this year, with a further increase forecast for 2015, according to the latest United States Department of Agriculture Livestock, Dairy, and Poultry Outlook report.

Eoin Kelly, Business Analyst, Bord Bia, said the report shows that the US dairy herd is set to total 9.26 million cows this year, a modest increase on 2013 levels.

A further increase in the region of under 1% is forecast for 2015, he says, with output per cow is predicted to be down slightly in 2014 at 22,255 pounds.

According to the report, a recovery in output per cow is forecast for 2015, reflecting lower grain prices. Feed costs have decreased year on year as a result of favourable weather conditions, which boosted yields for most crops. Corn production is forecast to be higher this year, however, soybean supplies have tightened somewhat but are unlikely to show major changes in price.

Lower feed costs, improved weather and increased demand has seen overall milk production rise. For 2014, total US milk production is expected to increase, reaching over 206 billion pounds, with a further increase in the region of greater than 3% forecast for 2015.

Looking at US imports, an increase is expected for the full year 2014 as a result of higher domestic prices relative to the world prices. On a fats basis, imports in 2014 are expected to increase to 4.3 billion pounds, due largely to increased imports of butterfat, while on a skim solids basis, imports are expected to reach 5.6 billion pounds in 2014.

Milk equivalent exports for 2014 and 2015 on a fats basis are forecast to reach 12.6 billion pounds for the current year, and 11.5 billion pounds for 2015. On a skim-solids basis, exports are forecast to reach 39.2 million, with a small decline expected in 2015 as exports of non-fat dry milk and whey products continue to slip.