U.S. Dairy Industry: market forces and external influences, are likely to shape the trajectory of the dairy industry in 2024
Source: The DairyNews
As the U.S. dairy industry looks ahead with optimism, experts from the U.S. Department of Agriculture (USDA) are cautioning about a nuanced landscape in the coming year. While overall growth is anticipated, it may not mirror the remarkable strides witnessed in recent times.
USDA Economist Michael McConnell shared insights into the dynamics of the dairy sector, highlighting the varied prospects for different dairy products. Despite expectations of tempered prices for butter and non-fat dry milk compared to previous years, McConnell pointed out their resilience, with butter prices exhibiting robust seasonal fluctuations and dry milk prices demonstrating steady improvement.
However, McConnell warned that not all dairy products will experience the same prosperity. Cheese prices, in particular, are projected to remain relatively subdued, although McConnell anticipates a rebound from recent lows. Overall, the dairy industry is expected to benefit from higher values for butter and dry milk, coupled with stronger prices for cheese and whey.
In terms of class prices, McConnell predicts that Class 4 prices will surpass Class 3 prices, reflecting the relative strength of butter and dry milk over cheese and whey. Despite this, he forecasts an all-milk price of $20.95 per hundredweight in 2024, indicating an improvement from the previous year but falling short of the peak observed in 2022.
While the potential for improved margins due to favorable prices and lower feed costs provides some relief for dairy producers, McConnell urges caution against unwarranted optimism. He emphasizes that factors beyond price dynamics, such as market forces and external influences, are likely to shape the trajectory of the dairy industry in the year ahead.
However, McConnell warned that not all dairy products will experience the same prosperity. Cheese prices, in particular, are projected to remain relatively subdued, although McConnell anticipates a rebound from recent lows. Overall, the dairy industry is expected to benefit from higher values for butter and dry milk, coupled with stronger prices for cheese and whey.
In terms of class prices, McConnell predicts that Class 4 prices will surpass Class 3 prices, reflecting the relative strength of butter and dry milk over cheese and whey. Despite this, he forecasts an all-milk price of $20.95 per hundredweight in 2024, indicating an improvement from the previous year but falling short of the peak observed in 2022.
While the potential for improved margins due to favorable prices and lower feed costs provides some relief for dairy producers, McConnell urges caution against unwarranted optimism. He emphasizes that factors beyond price dynamics, such as market forces and external influences, are likely to shape the trajectory of the dairy industry in the year ahead.
