CLASS III FUTURES ARE HOVERING IN THE $18 TO $19 per hundredweight range for 2024. This forecast does not herald a swift return to prosperity on the farm, said Sarina Sharp of the Daily Dairy Report.
THE UNPRECEDENTED BOOM OF 2022 led to a dairy bust in 2023, with the Class III price dropping to $13.77 in July before coming back up to $17.19 in August. Recovery in 2024 is likely but will depend on slower U.S. milk output and stronger exports. Read more on page 486.
DAIRY EXPORTS WERE DOWN THE FIRST HALF OF 2023, but Mexican demand remains a bright spot. U.S. dairy exports to Mexico jumped 25% the first six months of the year and demand remains strong.
MARGINS IN THE DAIRY MARGIN COVERAGE (DMC) PROGRAM hit another record low in July, falling to $3.52 per hundredweight (cwt.) That was down 13 cents from the previous record set in June.
ALTHOUGH THE PRICES FOR CORN AND ALFALFA HAY in the calculation came down from the month before, soybean meal went up nearly $30 a ton, reaching $443.15 per ton for July. Feed costs were $13.88 per cwt. of milk while the All-Milk price was $17.40 per cwt.
THE ALL-MILK PRICE IN WISCONSIN FOR JULY was $15.50, the lowest level seen in America’s Dairyland since May of 2020. Income over feed costs in the Badger State fell to a record-low $3.10 per cwt.
FOR THE FIRST TIME SINCE 2021, every load of spot milk changed hands at a premium the last week of August. A combination of hot weather and high cull rates reduced milk supply in the Midwest. After keeping vats full of inexpensive milk through the spring and most of summer, cheesemakers in the region are now slowing down.
LABOR ISSUES AND MORE FLUID MILK BOTTLING for school lunch programs also slowed milk moving to cheese vats in the Northeast. However, cheese output maintained pace in the West.
THE FARM BILL WILL EXPIRE AT THE END OF THE MONTH, and Congress has yet to agree what will be included in the next five-year bill. Nutrition programs take most of the funding. The main dairy programs funded in 2018 were Dairy Margin Coverage (DMC), Dairy Revenue Protection (Dairy-RP), and Livestock Gross Margin (LGM-Dairy).
IF A NEW BILL IS NOT PASSED BY JANUARY 1, 2024, some programs will revert to policy from decades ago. According to a report by the Congressional Research Service, the cost of price supports for dairy and other field crops could skyrocket if the farm bill expires.
DAIRY SUBSIDIES COULD COST BETWEEN $15 billion and $19 billion a year, a 28-fold increase, without a new farm bill, the report noted.
FLUID MILK SALES DIPPED TO 43.4 BILLION POUNDS in 2022, down over 1 billion pounds from the year before. Whole milk and flavored milk (not whole) sales were up slightly, while the categories of reduced fat (2%), low-fat (1%), skim, and flavored whole milk declined.
AT THE WORLD DAIRY EXPO DAIRY PRODUCT CONTEST, judges evaluated entries from 43 states in 96 classes. Winning the most awards was Prairie Farms Dairy, an Illinois-based cooperative that won 62 awards in 38 contest classes, including 22 first-place finishes.
THE NATION’S TOP 50 CO-OP LIST saw no major changes. The 50 largest co-ops had 23,389 member farms and handled 81.3% of the nation’s 226 billion pounds of milk produced last year. Learn more on page 490.