WITH FEED COSTS CLIMBING BY A DIME and the All-Milk price dropping by 30 cents in October, the margin to make milk fell 40 cents from September’s record high of $15.57 in the Dairy Margin Coverage program.
IN OCTOBER, CORN AVERAGED $3.99 PER BUSHEL, soybean meal netted $342 per ton, and premium alfalfa hay fetched $236 per ton. With feed prices at the lowest levels in well over five years, there is an opportunity for dairy farmers to lock in favorable feed prices this season.
THE ALL-MILK PRICE PEAKED AT $25.50 IN SEPTEMBER and is projected to fall back to the $23 range by December. Overall, the All-Milk price could average $22.60 per hundredweight in 2024. Presently, USDA is forecasting a $22.85 All-Milk price for the upcoming year.
NEXT YEAR, MILK PRICES WILL VARY BY REGION with Class IV butter and milk powder leading the way. Futures contracts range from $20.65 to $20.90 for January to November 2025 Class IV contracts. In early December, Class III contracts traded near a $19 average for January to June 2025 and then dropped by 35 cents in the final six months.
BUTTERFAT WILL LEAD THE WAY for the third straight year in multiple component pricing markets, which price over 90% of the nation’s milk. In November, butterfat brought $3.06 per pound and protein was $2.32.
INTERNATIONALLY, BUTTER AND CHEESE PRICES have been stronger than those in the U.S. As a result, Fonterra has lifted the 2024-2025 milk price forecast three times. Initially, New Zealand’s largest dairy co-op pegged milk at $8.50 per kilogram of milk solids (kgMS). In September, November, and December, it lifted prices by 50 cents to a $10 midpoint.
AT 661 POUNDS PER CAPITA, 2023 dairy product consumption moved to levels not seen since Dwight Eisenhower served his second term as U.S. President. Compared to 2022, consumption climbed 7 pounds.
CHEESE HAS BEEN THE STAR of the dairy product show as Americans consumed a record 40.5 pounds in 2023. On the flip side, fluid milk consumption fell 1.5% to 128 pounds. While the fluid milk number of 128 pounds seems high on the surface when compared to cheese, remember that 100 pounds of fluid milk yields 11.24 pounds of cheese.
COW NUMBERS REMAINED RELATIVELY STABLE over the past year at 9.365 million head. That’s 10,000 more cows in the national herd when compared to the same time last year. With more dairy plant capacity coming online, Texas was up 40,000 head; South Dakota, up 17,000 head; and Kansas, up 8,000 head compared to one year ago.
DAIRY HEIFERS REMAIN AT 20-YEAR LOWS and are now fetching record prices. To shore up numbers, dairy farmers culled 499,100 fewer dairy cows from Labor Day 2023 to mid-November 2024 as shown below.
