Supply and demand are often on a teeter-totter ride; when one goes up, the other goes down. This is certainly true for our dairy markets.
“The demand side is going to paint the picture for 2024,” predicted the University of Wisconsin-Madison’s Leonard Polzin during the January Hoard’s Dairyman webinar. But the impact demand will have will depend on the supply of milk to make dairy products, and Polzin dug into that a bit during his presentation.
“Supply starts with the dairy cow itself,” Polzin stated. While U.S. dairy cow numbers were relatively flat through much of 2022, farmers responded to the higher milk prices and the national herd grew late that year and in early 2023. A few months into 2023, cow numbers started to decline, and that trend continued.
“Cow numbers aren’t outside of any historical range,” Polzin shared, but cow numbers did trend lower through 2023.
The same is not true for milk production per cow. “All things considered, we have been milking well,” Polzin said. Production levels in 2023 were similar to 2022, and overall milk per cow continues to climb.
Producers are also responding to market incentives to make milk with higher components, Polzin noted. Both fat and protein production were higher every month in 2023 compared to the year before.
“We are getting better and better at feeding all the time, and genetics also plays a role,” Polzin explained. “All in all, we are getting very efficient at what we do and very good at producing milk. Hats off to the dairy producers.”
To learn more about dairy trends in 2023 and where milk prices might land, watch the January Hoard’s Dairyman webinar, titled “The dairy situation and outlook for 2024.” This webinar was sponsored by QLF.