Dairy Outlook: September 2023

Chris Zoller, Extension Educator, Agriculture and Natural Resources, Tuscarawas County, Ohio State University Extension

In mid-September, the United States Department of Agriculture Economic Research Service (USDA ERS) released its monthly Livestock, Dairy, and Poultry Outlook. The latest report is available here: https://www.ers.usda.gov/webdocs/outlooks/107464/ldp-m-351.pdf?v=6487.8. This article will summarize portions of the dairy section of the report.

Supply and Use

According to the USDA's National Agricultural Statistics Service (NASS), milk production in the United States totaled 19.075 billion lb (615 million lb/day) in July 2023, 0.5% lower than July 2022. Milk cows on farms averaged 9.4 million head in July, down 13,000 head from July 2022. The average milk production per cow was 2,029 lb in July 2023, down 9 lb from July 2022. Very high temperatures and dry weather are the primary factors in reduced milk production.

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Dairy Margin Coverage milk margins dropped below $4 in June and July. Values below $4 are considered “catastrophic” by the program, triggering indemnity payments to all participants.  The table below summarizes the all-milk price and feed costs.

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Price Forecast: 2023-2024

The September report revised milk prices up slightly for the remainder of 2023. The milk supply typically responds to changes in prices with a lag of several months. The low margins experienced in 2023 are expected to contribute to further contraction of the dairy herd in the first half of 2024. However, some rebuilding of the milking herd is expected in late 2024 as milk prices improve and feed costs moderate.


Projection for 2024











Moving Forward

While the price projections from the latest USDA ERS report have been revised upward, profitability will continue to be an issue for many dairy producers. Enrolling in the OSU Extension Farm Business Analysis and Benchmarking Program can help evaluate your financial position and assist with future planning. Please see https://farmprofitability.osu.edu/ for additional information.