MILK PRICES WILL MORE OR LESS TREAD WATER in 2024, according to UW-Madison’s Leonard Polzin. Although Class III shows some upward movement, prices only average $17 through August. Meanwhile, Class IV futures hover around $19.50 (see chart below).
POLZIN DOESN’T EXPECT THE GAP BETWEEN Class III and Class IV prices to close any time soon, and if that is the case, producers will see a notable difference in milk checks depending on if they sell in a Class III or Class IV market, he said during the Hoard’s Dairyman webinar.
U.S. MILK FAT PRODUCTION TOPPED 9.3 BILLION POUNDS in 2022. Cheese utilized 42.3% of all fat production, while butter accounted for 17.8%, according to numbers recently released by USDA. Fluid milk used 10.2%; frozen dairy products, 7.1%; and sour cream, 3.1%.
“AT THE END OF THE DAY, EVERY OUNCE OF MILK SOLIDS finds a home,” wrote Cornell’s Andrew Novakovic. Read more on page 47.
GLOBAL CHEESE DEMAND IS PROJECTED to reach an all-time high of 47.7 billion pounds this year, according to USDA. That is up 5.7% from 2019. However, global production is rising faster than demand. USDA expects U.S. production to be 9.8% higher in 2024 than it was five years ago, outpacing the 8.3% predicted growth in domestic cheese demand.
A GALLON OF WHOLE MILK COST AN AVERAGE OF $4.34 in 2023, a new record high. That was up 8 cents from 2022, which was also a record year, and far surpassed the previous record of $3.84 established in 2014. The average price shoppers paid for reduced fat (2%) milk was $4.29 per gallon, also a record. Organic milk posted a new high as well.
THE SAFETY OF THE U.S. MILK SUPPLY continues to be outstanding. From October 1, 2022, to September 30, 2023, just 345 milk samples out of nearly 3.7 million samples (0.0009%) tested positive for animal drug residues. That is an all-time low since the U.S. Food and Drug Administration (FDA) started compiling this information in 1994.
THE NOVEMBER MARGIN FOR THE DAIRY MARGIN COVERAGE (DMC) program was $9.58 per hundredweight. This was the first time the margin landed above the maximum $9.50 Tier 1 coverage level in 2023.
THE FEDERAL MILK MARKETING ORDER HEARING reconvened in mid-January in Carmel, Ind. Although the process has taken much longer than expected, National Milk Producers Federation’s Gregg Doud said the hearing is incredibly important for U.S. dairy producers.
