USA: Dairy Cow Numbers Decline After Challenging 2023
Source: The DairyNews
Following a challenging year in 2023, dairy farmers have witnessed a decrease in the number of dairy cows in herds, signaling a trend of lower cow numbers. Leonard Polzin, a dairy markets and policy outreach specialist at the University of Wisconsin-Madison, highlighted this shift during a webinar hosted by Hoard’s Dairyman.
While the cow numbers aren't historically low, the trend towards lower numbers is evident. Polzin noted that in 2022, there was a nearly flat number of cows, but as 2023 progressed, the numbers started to decline. Despite a slight drop in milk per cow in 2022, the dairy herd has been performing well, with milk production per cow on track to be slightly above the previous year.
The total U.S. milk production reflects the impact of lower cow numbers, with some months in 2023 experiencing less total milk production compared to 2022. The market signals suggest an abundance of milk, emphasizing the need for market clearance to maintain production levels.
An interesting aspect highlighted by Polzin is the increase in milk components' value since 2010, with the milk fat test for the national herd reaching 4.32%. Improved feeding practices and genetics contribute to the rising trend in milk components. The protein test also showed efficiency, hitting 3.41% in November 2023.
Regarding milk prices, Polzin discussed the Class III price, which consists of cheese and dry whey. While total cheese production in 2023 has been close to 2022 levels, new dairy processing facilities coming online suggest an increase in total cheese production in the future. Cheese inventory has been ample, with exports experiencing some weakness, requiring efforts to catch up.
Class IV milk prices, which include butter and nonfat dry milk, saw solid butter production throughout the year. Although the production of dry skim products decreased, butter prices remained favorable for the industry. Export challenges were noted, especially with China showing uncertainty in purchasing.
Polzin emphasized the variability in the cost of production for U.S. dairy farms, with almost a $10 spread. The average interest expense across different farm sizes for 2022 was 86 cents per hundredweight, and Polzin anticipates a tight year for dairy operations in 2024, with challenges on the demand side affecting milk prices.
The total U.S. milk production reflects the impact of lower cow numbers, with some months in 2023 experiencing less total milk production compared to 2022. The market signals suggest an abundance of milk, emphasizing the need for market clearance to maintain production levels.
An interesting aspect highlighted by Polzin is the increase in milk components' value since 2010, with the milk fat test for the national herd reaching 4.32%. Improved feeding practices and genetics contribute to the rising trend in milk components. The protein test also showed efficiency, hitting 3.41% in November 2023.
Regarding milk prices, Polzin discussed the Class III price, which consists of cheese and dry whey. While total cheese production in 2023 has been close to 2022 levels, new dairy processing facilities coming online suggest an increase in total cheese production in the future. Cheese inventory has been ample, with exports experiencing some weakness, requiring efforts to catch up.
Class IV milk prices, which include butter and nonfat dry milk, saw solid butter production throughout the year. Although the production of dry skim products decreased, butter prices remained favorable for the industry. Export challenges were noted, especially with China showing uncertainty in purchasing.
Polzin emphasized the variability in the cost of production for U.S. dairy farms, with almost a $10 spread. The average interest expense across different farm sizes for 2022 was 86 cents per hundredweight, and Polzin anticipates a tight year for dairy operations in 2024, with challenges on the demand side affecting milk prices.
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