Chris Zoller, Extension Educator, Agriculture and Natural Resources, Tuscarawas County, Ohio State University Extension
The United States Department of Agriculture Economic Research Service (USDA-ERS) released its monthly Livestock, Dairy, and Poultry Outlook (https://www.ers.usda.gov/webdocs/outlooks/101676/ldp-m-325.pdf?v=2053.7) on July 16, 2021. This monthly outlook provides supply and use projections based on the World Agricultural Supply and Demand Estimate (WASDE) report. The WASDE report, also released monthly, is available here: https://www.usda.gov/oce/commodity/wasde.
Production and Use Data
According to data from the National Agricultural Statistics Service (NASS), milk cow numbers in the United States have increased each month since July 2020 (see graph below). The number of dairy cattle slaughtered at federally inspected facilities has been comparable to a year ago levels; however, for the week ending June 27, 2021, slaughter numbers were 4,100 higher than the same week one year ago.
Milk production in May was 0.5 lb less than April, averaging 67.4 lb/cow. Over the last 20 years, the only larger decreases from April to May occurred in 2012 and 2020. Possible reasons for this decrease, as described in the report, include:
- Actions taken by some cooperatives and handlers may have discouraged higher production
- Increased feed costs
- Hot, dry weather in the western U.S.
- The U.S. Agriculture Drought Monitor, as of July 13, reported 50% of milk cow inventory, 64% of alfalfa acres, 36% of corn acres, and 31% of soybean acres were in areas experiencing drought
Dairy Price Forecast – 2021
USDA projects 9.5 million head of dairy cows in 2021, 5,000 more than in the previous month’s forecast. Per cow production for the year is estimated at 24,020 lb, a reduction of 45 lb from last month’s report. Continued drought, high feed prices, and reduced milk prices result in the lowered forecast.
Looking Ahead – Milk Production and Pricing - 2022
The forecast for 2022 calls for an increase of 15,000 head compared to 2021, bringing the total estimated number for the year at 9,515 million head. USDA is expecting milk production to increase to 24,335 lb/cow, about 315 lb higher than 2021.
This forecast calls for an increase in cow numbers, a slight increase in production, and no real improvement in milk pricing. Dairy producers are encouraged to evaluate inputs, monitor expenses closely, and consult with trusted advisors to develop plans.
Dairy farmers and advisors are encouraged to consult the Ohio State University Extension Dairy Excel 15 Measures of Competitiveness bulletin available at: https://dairy.osu.edu/sites/dairy/files/imce/2019%2015%20Measures%20of%20Dairy%20Farm%20Competitiveness%20Final%20%281%29.pdf, Ohio State University Extension Farm Budgets available at: https://farmoffice.osu.edu/farm-management/farm-budgets, and the Ohio State University Extension Ohio Farm Business Analysis and Benchmarking Program at: https://farmprofitability.osu.edu/.
USDA Economic Research Service Livestock, Dairy, and Poultry Outlook, July 2021 https://www.ers.usda.gov/webdocs/outlooks/101676/ldp-m-325.pdf?v=2053.7
USDA Economic Research Service, World Agricultural Supply and Demand Estimate (WASDE), July 2021 https://www.usda.gov/oce/commodity/wasde/wasde0721.pdf