USDA Releases March Dairy Report

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 March 2022 Livestock, Dairy, and Poultry Outlook.  The complete report is available here:  This article will provide a summary of the dairy portion of the report.

Supply and Use

The graph below shows U.S. milk production for 2020, 2021, and January 2022.  According to USDA National Agricultural Statistics Service (NASS), U.S. milk production in January 2022 was 1.6% below January 2021.  This is the largest year-over-year percentage decline in average daily production for any month since 2002.

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Milk cow numbers in January 2022 were 82,000 less than the inventory in January 2021 and milk production per cow in January 2022 was 15 lb less than the January 2021 production level.  USDA ERS reports that high input prices, increased feed costs, and corn silage quality issues likely contributed to lower milk production.

Feed Price Projections

Corn for the 2021/2022 marketing year is now expected to average $5.65/bu, an increase of $0.20 from last month’s projection.  Price increases for other feed inputs were also reported.  Soybean meal is estimated at $420/ton and the January alfalfa hay price was $211/ton, an increase of $43/ton compared to January 2021.  The five-state weighted average for premium alfalfa hay was $262/ton in January 2022, $56 higher compared to January 2021.

Dairy Forecasts for 2022

Milk production and milk cow numbers are expected to decline in 2022.  Higher input prices, improved cull cow prices, and low numbers of replacement heifers are contributing factors.  Milk per cow is anticipated to average 24,160 lb/head, a year-over-year increase of 212 lb. 

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Wholesale prices have been raised because of relatively high domestic and international prices.  The 2022 prices are forecast at: $21.65/cwt for Class III, $23.70/cwt for Class IV, and the all-milk price forecast is $25.05/cwt.

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The increase in milk price is positive, but with uncertainty continuing given high input costs and impacts of the Russian invasion of Ukraine.  I encourage producers to continue to pay close attention to budgets.  As you budget and plan, speak with your Extension Educator, nutritionist, lender, and veterinarian.

These resources may be of interest with planning and budgeting: