Dairy farmers likely to see lower milk prices in 2023

Factors include an expected slight decline in domestic sales of milk and dairy products, more competition from dairy exports, and an expected increase in milk production.

“While milk prices were record high, it was an average year for dairy farmers,” Cropp said. “With higher feed prices, higher labor costs, and higher costs of all other inputs that dairy farmers buy, profit margins have been squeezed. So while there were gains, it wasn’t a great year.”

Cropp added that “2023 is shaping up to not be a great year for dairy farmers. But I must point out that milk prices are very sensitive to small changes in milk production, sales and exports of milk and milk products. So these factors could change as the year progresses and milk prices end up better than forecast now, especially for the second half of the year.”

Milk prices will be considerably lower in 2023 than the record prices of 2022, Cropp said. Milk production for the year could rise by about 0.8%, he said, while domestic sales of milk and milk products are expected to decline slightly, driven by lower sales of milk for beverages.

“The United States will experience increased competition for dairy exports as milk production increases in Western Europe and possibly New Zealand, depending on the weather,” Cropp said of those two leading exporters. He also said that the US Department of Agriculture estimates that the average price of milk in the United States will be $20.70 per cwt, down $4.86 from $25.56 by 2022.” The average price of milk in Wisconsin could also be $4 to $5 lower,” Cropp said. saying.

“How much lower milk prices will be varies considerably between forecasters, but they all predict much lower milk prices,” he said.

“Milk prices are likely to be lower during the first half of the year, with increases for the second half, as lower milk prices and higher feed and other input costs squeeze profit margins. , resulting in a reduction in the number of cows and a moderate increase in milk per cow.” Cropp said. “In addition, milk production hits a low point in late summer, schools open and demand for butter and cheese increases as buyers build up inventories for the strong sales period from Thanksgiving through Christmas. ”.