A report by CoBank shows U.S. milk production growth is outpacing processing capacity growth, leaving dairy processors struggling to keep pace. Every year, U.S. dairy farmers produce three billion more pounds of milk than the year before.
CoBank says that those increase challenge processers, who will need an estimated 27 billion pounds more of U.S. milk processing capacity over the next ten years if current trends persist. The report says that numerous new plants and plant expansion projects are underway or recently completed, but available capacity remains a challenge at times, especially in the Northeast and Mideast areas, and has strained the ability of dairy cooperatives to fill the role of market balancers.
Since these co-ops largely bear the brunt of the near-term oversupply of milk, they are increasingly looking for ways to discourage producers from expanding production.