As temperatures rise and days lengthen, the spring flush in U.S. dairy herds will produce excess milk and put pressure on prices.

U.S. milk production in February totaled 17.7 billion pounds, up 0.8% year over year. USDA will release March milk production on April 19.

But further growth in milk production is expected through the spring as the milking herd has continued to expand, with production growth tipping toward the Midwest and Plains states, according to economists at CoBank.

The U.S. dairy cow herd totaled more than 9.4 million head, up a modest 37,000 head from a year earlier. But the herd grew 12,000 head in February, with Texas and Idaho continuing to lead in growth.

“The increased milk supply, combined with ongoing weak domestic demand, pushed down all-milk prices earlier in the quarter with spot milk selling at a significant discount to Class pricing, particularly across the Plains and Midwest,” the economists said in their latest quarterly report.

The U.S. all-milk price for January fell $1.60 per hundredweight from December to $23.10 cwt. It fell $1.50 cwt. in February to $21.60 cwt., according to USDA.

“However, over the past few weeks, surging cheese prices have lifted Class III futures to a $2 premium over Class IV,” the economists said.

The margin over feed costs in January was $7.94 cwt., down $1.82 cwt. in December. That margin dropped $1.15 cwt. in February to $6.79, according to USDA.

“While milk supply is slowly rising in the U.S., overseas production has also rebounded,” the economists said.

Milk production in the EU has averaged about 1% annual growth since September, and New Zealand production is now holding steady after more than a year of declines.

“Weakness in milk prices is expected to curtail global production growth in the second half of the year,” they said.

Back in the U.S., processors continue to struggle with constraints in the supply chain, specifically with trucking and labor. But they’ve managed to operate to take milk during the spring flush.

“A short-term squeeze in the availability of cheddar supplies lifted prices sharply late in the quarter, but long-term trends continue to point to cheese prices succumbing to production pressure amid a slowing global economy in the months ahead,” the economists said.

U.S. cheese manufacturers produced a record amount of cheese at the start of the first quarter, with January production up 3.2% year over year and February production up 0.4% year over year.

“Cheese stocks, though, are falling despite the faster production pace as exports remain robust,” they said.

The robust export pace for all dairy products has carried over into 2023, with January shipments totaling 466.1 million pounds — a record for the month.

But “a slowing global economy is raising concerns of weakening international demand for dairy products while high retail prices in the U.S. have dampened demand growth,” the economists said.