Despite rumors of its demise U.S. milk producers expect 2024 to be a profitable year according to the latest report released from Zisk.
Zisk is a free app that incorporates data from producers on their milk contracts, feed prices and a predictor of dairy enterprise profitability. In its third annual report, by combining the data of all of its users, it shows that dairy producers are expecting a profitable year, although much less than for the previous two years. Zisk has now been downloaded by over 4,000 farm owners, representing 4.2 million cows, or 45% of the U.S. herd. As such, aggregating the data from all those farms shows some fascinating insights, including data on herd size, average basis, milk production in an overall trend report showing what to expect in 2024. The report is available for free online at Ziskapp.com.
The 2024 predictions also show that farm size matters; larger farms will make higher profits per cow, while smaller ones, especially those with less than 250 cows will generally be unprofitable. While market prices going forward are not favorable, the report shows how many dairies have guaranteed profits by locking in their prices, especially the larger ones, and this is increasingly making a difference over those who don’t have the experience or access to these market tools such as Ever.ag and mydairydashboard.com.
Large Herds Perform Better
U.S. herd sizes continue to increase, and the Zisk report shows that farms with more than 5,000 cows (averaging more than 13,000 cows in this report) will make the most money, but even those with more than 1,000 cows are much more profitable than farms with fewer. In comparison to Zisk’s previous annual reports, this year’s data shows bigger farms have lower costs, better prices and economies of scales and expect to earn more money per cow.
The Southeast expects to be the most profitable region in the U.S. in 2024, with an average projected profit of $857 per cow. While smaller farms, those with fewer than 250 cows, expect to continue to incur losses, the entire region’s overall profit per cow expects to be similar to previous year, led by Florida and Georgia whose herds are increasingly dominated by farms with over 5,000 cows, expecting to have strong years. Many other southeastern states in contrast are projecting losses.
The Midwest will be the second most profitable overall, projecting $701 per cow, but as in previous years reports the smaller herds will make much less money. Wisconsin herds (average size 833 cows) are projecting $1,000 per cow profits while South Dakota, with almost twice the average herd size, expects $672 per cow.
Larger herds in states such as Colorado and Utah expect the average profit per cow at nearly $1,300 and $1,100, with average herd sizes over 2,000 and 1,100 respectively.
The least profitable region for producing milk in 2024 is expected to be the Northeast, although Rhode Island is projecting the highest profit per cow in the nation despite an average herd size of 35. Massachusetts, New Hampshire, New Jersey and Kentucky expect some of the lowest average profits in the U.S. in 2024. As a region, the Northeast was also the least profitable this year.
The trends reported last year by Zisk remain and are reinforced for 2024. Farms are getting larger, and larger farms are more profitable. Their economies of scale allow them to produce milk more cheaply and access to lock in better prices and markets. In markets where losses might be expected, the use of hedging for feed and selling milk has never been more important.
Zisk is the fastest growing dairy app in the world, now used by 4,041 U.S. dairy farms milking nearly 4.2 million cows. As a result, the data collected by Zisk represents a sample of almost half of the U.S. herd. It can be downloaded for free and provides producers with profitability estimates for their farm and projections of how those profits will change moving forward.
