Highlights from the Recent USDA Dairy Forecast

Chris Zoller, Extension Educator, Agriculture and Natural Resources, Tuscarawas County

The latest USDA Economic Research Service (USDA ERS) Livestock, Dairy, and Poultry Outlook was released on September 16, 2021.  The complete report is available here: https://www.ers.usda.gov/webdocs/outlooks/102168/ldp-m-327.pdf?v=6900.  This article will highlight sections from the dairy portion of the report.

Supply and Use

July 2021 milk production was 2% higher than the same month in 2020, the number of dairy animals peaked in May 2021 at 9.509 million head, and the July number came in at 9.500 million head.  Increased culling and slaughter of dairy cows at federally inspected plants contributed to these changes.  Milk production for July 2021 was 14 lb higher than July 2020, averaging 2,015 lb/cow.

Chart, line chartDescription automatically generated

Chart, line chartDescription automatically generated

Corn and soybean meal prices were lowered in the recent report.  The 2021-2022 marketing year average for corn was reduced to $5.45/bushel.  Soybean meal for 2020-2021 is projected at $360/ton.  The hay market continues to be strong.  Alfalfa hay in July was $201/ton, up $2/ton from June 2021 and $29/ton more than July 2020.

Dairy Forecast

Milk cow inventory has been reduced by 15,000 from the previous month to 9.485 million head because of increased culling and higher slaughter numbers.  The estimated milk at 24,010 lb/cow in 2021 is 10 lb lower than the previous month’s projection.  USDA ERS is expecting milk production to be 227.8 billion lb for 2021.

Milk Price Forecast - 2021

Category Forecast Price
Class III $16.65/cwt
Class IV $15.55/cwt
All Milk $18.15/cwt

Milk Price Forecast - 2022

Category Forecast Price
Class III $16.45
Class IV $16.05
All Milk $18.40