Dairy outlook improving slightly

By 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. 

According to the USDA’s National Agricultural Statistics Service (NASS), milk production in the United States totaled 19.075 billion pounds (615 million pounds per 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 pounds in July 2023, down 9 pounds from July 2022. Very high temperatures and dry weather are the primary factors in reduced milk production.

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 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.

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.