At the start of each year, it’s common to hear and read “state of” messages, summarizing current conditions and strategies to address future challenges. In an industry that combines business and biology with family and finances, the description of dairy’s state frequently requires the broad skills of a meteorologist, monitoring today’s circumstances against the past and diagramming the movement of variable high-pressure/low-pressure fronts affecting tomorrow.
The national map
What “state” you’re in depends on location and the turbulence affecting productivity and markets. Here’s a look at the national map.
Year-over-year growth in U.S. milk production was small in 2022, primarily in the final six months and in just a few areas. Currently, the USDA’s January estimate of dairy cattle inventories indicates there are slightly higher dairy cow numbers to start 2023. However, as a percentage of that herd, there are the fewest replacement heifers in decades.
Once more robust, the production outlook has weakened somewhat. Even so, many forecasters project 2023 milk prices that will be $3 to $4 per hundredweight (cwt) less than 2022, maybe lower.
Feed prices maintain a high-pressure front, with benefits to those who can grow it at home and if they can afford the land and have water. Rising interest rates may apply upward pressure on costs and downward pressure on investment. For those utilizing USDA risk management programs, indemnity payments could start early and may prevail through much of the year.
Possible policy changes will swirl around Washington, D.C., precipitated by the 2023 Farm Bill and potential Federal Milk Marketing Order “modernization.” Demand faces domestic inflationary pressures and export headwinds. Turning to the weather, atmospheric rivers and snow days are adding hopefulness of more moisture in the West.
For more localized conditions and forecasts for your area, see the following articles:
- Mideast: Financial picture has an undercurrent
- Southeast: The future hinges on marketing changes
- Northeast: A medley of opportunities and concerns
- Organic dairy struggles abound
- Wisconsin: ‘Future ready’ with uncertainty and an elephant
- Southwest: An eye toward the sky (and the bottom line)
- California: Resiliency in a changing climate
- Appalachian: Similar concerns, diverse answers
- Northwest: Proceeding with caution despite global optimism
- I-29 Corridor: Sustaining a stable and strong pulse
- Central: Dynamic change in the ‘frontier’
Check online for more
With expanded outreach and input this year, not all the State of Dairy information fit on the printed pages of this issue of Progressive Dairy. Visit our website to find:
- National Milk Producers Federation’s Peter Vitaliano identifies the key factors driving the economics of dairy in 2023.
- In a question/answer column, Krysta Harden, president and CEO of the U.S. Dairy Export Council, describes the positives and headwinds facing dairy exporters in the year ahead.
- A look at dairy from the perspective of regional and national agricultural lenders and national and international market analysts.
- A stroll down the retail dairy aisle and look at inflation’s impact on dairy consumers, with IRI’s John Crawford and others.
- Additional state (Pennsylvania: 2023 brings concerns, opportunities in the Commonwealth), regional (State of Dairy: A panoramic view) and international input.
Finally, beyond these reports, detailed statistical analysis of state and national dairy herds and milk production will be featured in the April 1, 2023, issue of Progressive Dairy.
