Dairy Report: Low Milk Prices and Higher Beef Prices Take a Hit on Dairy Cow Numbers
Dairy Report 072523
The USDA failed to deliver good news to dairy producers in it’s recent U.S. Milk Production Report. Production in the 24 for major dairy producing states last month totaled just over 18 billion lb. That’s up a fraction from June of last year. Production per cow was up about 1 lb. and the number of dairy animals in those 24 states now stands at 8.93 million. That’s 14,000 more than June of last year, but 20,000 less than May 2023.
“The biggest takeaway would be the decline in cow numbers,” says Robin Schmahl of AgMarket.net. “Low milk prices and high beef prices have led farmers to look for additional ways to generate some income. And that’s probably the biggest factor that’s going to influence milk prices as we go forward from here.”
Experts say the massive fire on a dairy farm in Texas a few months ago is reflected in these latest numbers from that state. Texas was down 13,000 cows with production down 5%.
Class I Pricing
In response to petitions from the dairy industry, the USDA says it will hold a hearing for a potential revision to the federal milk marketing order (FMMO) system. Dairy farmers know that system determines the price farmers receive for fresh milk. The hearing will take place on August 23 in the Indianapolis suburb of Carmel.
The American Dairy Coalition (ADC) has indicated strong support for a change in the current price setting formula for milk intended for retail sale. They are specifically asking a proposal to use the ‘higher of’ method rather than the current ‘average of’ pricing method. The ADC says the net loss that has accumulated for dairy producers since the ‘average of’ method was implemented will exceed $1 billion next month. Their CEO says the formula has taken 55 cents per cwt. away from farmers on all Class I use nationwide.
For more industry news, read:
- June U.S. Milk Production Report Reflects Poor Performance
- Broadband Bill Would Push Internet to Every “Last Acre” in Rural America
- Food Inflation Outlook for 2023 Drops Below Previous Projections
