Milk prices in 2022 saw record highs not seen since 2014. Feed prices, labor costs and inflation however cut deep into producers profit margins. These challenges will likely remain for dairy farmers throughout 2023. But unfortunately, economists are predicting milk prices will also sing a lower tune.
In it’s January World Ag Supply and Demand Estimates report, the USDA lowered both its 2022 and 2023 U.S. milk production estimates from December. Milk production for 2022 was lowered due to lower expected milk per cow while 2023 production forecasts were lowered due to lower average cow inventory.
Weak domestic demand for components and increased price pressure in international markets is projected to lower Class III prices in 2023. The forecasted 2023 Class III price dropped 95 cents to $18.85 per cwt. Class IV price forecasts for 2023 also sang a lower tune, dropping 85 cents to $19.25. Currently, the 2023 all-milk price stands at $21.60, down 90 cents from December 2022.
