Chris Zoller, Extension Educator, Agriculture and Natural Resources, Tuscarawas County, Ohio State University Extension
The USDA Economic Research Service (ERS) Livestock, Dairy, and Poultry Outlook was released July 18, 2023. This report summarizes economic changes based on reporting from the USDA WASDE and other monthly reports. The full report is available here: https://www.ers.usda.gov/webdocs/outlooks/106951/ldp-m-349.pdf?v=4081. This article will focus on highlights from the dairy section of the report.
Supply and Use Data
According to data compiled by the USDA National Agricultural Statistics Service (NASS), milk production, cow numbers, and milk per cow were all higher compared to the same period one year ago.
|
Category |
May 2023 |
Difference from May 2022 |
|
Milk production |
19.875 billion pounds |
Up 0.6% |
|
Milk cows |
9.430 million head |
Up 13,000 head |
|
Milk per cow |
2,108 pounds (per month) |
Up 10 pounds |
According to USDA NASS, items factored to calculate the dairy farm margin for the Dairy Margin Coverage program were mixed. The margin in May 2023 declined to $4.83, which was $7.68 lower than May 2022. This is the lowest dairy farm margin so far in 2023.
Input costs and drought conditions have contributed to high dairy cow slaughter so far this year. The chart below shows weekly slaughter and compares 2023 to 2022.
Milk Forecast 2023
The Class III milk price is projected at $16.05/cwt because of expected lower prices for cheese and dry whey. This represents a reduction of $0.65/cwt from the forecast last month. Class IV and the all-milk price are projected down compared to the previous month forecast. Class IV is forecasted at $18.20/cwt and the all-milk price for 2023 is at $19.55/cwt.
Milk Forecast 2024
Unfortunately, price projections for 2024 are expected to drop compared to 2023. The Class III milk price is forecasted at $15.95/cwt. Class IV is expected to be $17.45/cwt and the all-milk price for 2024 at $19.10/cwt.
Moving Forward
If these projections hold true, attention to detail and a critical review of all expenses will become increasingly more important. Ask questions of your Extension Educator, veterinarian, lender, and other trusted advisors to develop a plan.