Here’s an update on economic factors impacting your dairy finances as the calendar turns to December 2023.

Natzke dave
Editor / Progressive Dairy

Dairy cull cow marketing slower

A smaller milking herd and improving milk income margins are likely contributing to lower U.S. dairy cull cow marketing this fall. Through Nov. 18, the number of dairy cows marketed for beef had trailed year-ago levels for 11 consecutive weeks and was down 46,100 from the same period a year earlier.

Year to date, dairy cull cow marketing was estimated at 2.766 million, up about 64,500 from a year earlier.

October cull cow prices remained strong

U.S. average prices received for cull cows (beef and dairy, combined) in October averaged $108 per hundredweight (cwt), down $6 from September 2023 but still $24 per cwt more than October 2022.

January-October 2023 cull cow prices have averaged $102.42 per cwt, $16.90 more than a year ago and the highest average since 2015.


A reminder to producers: The end of December is historically a poor time to market cull cows, as holidays and other factors impact slaughter plant schedules and cow prices.

December FSA interest rates higher

Private lender interest rates on agricultural loans are moving higher, and so are rates on loans through the USDA’s Farm Service Agency (FSA).

The FSA announced loan interest rates for December 2023. Interest rates for operating and ownership loans (compared to November) are as follows:

  • Farm operating loans (direct): 5.75%, up from 5.375%
  • Farm ownership loans (direct): 5.875%, up from 5.5%
  • Farm ownership loans (direct, joint financing): 3.875%, up from 3.5%
  • Farm ownership loans (down payment): 1.875%, up from 1.5%
  • Emergency Loan (amount of actual loss): 3.75%, unchanged

The FSA also offers guaranteed loans through commercial lenders at rates set by those lenders.   

For more information producers can contact their local USDA Service Center.

Read also: Economic Update: Ag loan interest rates nearing 9%

Dairy downturn, higher interest expenses highlight USDA 2023 farm income forecast

With the end of the year nearing, the USDA’s Economic Research Service issued its latest report on factors affecting annual farm income. Dairy is among the U.S. ag sectors feeling the biggest negative financial impact.

With lower milk prices, calendar year 2023 cash receipts from milk marketings are expected to decrease $10.5 billion (18.3%) from 2022.

Helping offset about 12% of that decline, 2023 Dairy Margin Coverage (DMC) program payments are forecast at about $1.3 billion, up by $1.1 billion compared with 2022.

Among production costs, interest expenses are forecast to have a significant increase in nominal terms. At $34.4 billion in 2023, interest expenses would be up almost 43% from 2022 due to both higher debt levels and higher interest rates. While in nominal terms this level is forecast to be the highest to date, in inflation-adjusted dollars, interest expenses were at least 50% higher in the early 1980s, according to the report.

Among other report highlights, overall U.S. net farm income, net cash farm income and cash receipts are all forecast substantially lower in 2023 compared with record highs in 2022. Read “Farm Sector Income & Finances: Farm Sector Income Forecast, Nov. 30, 2023.”

August all-milk, mailbox prices compared

National average August 2023 “mailbox” prices averaged about 75 cents per cwt less than announced average “all-milk” prices for the same month:

  • August U.S. all-milk prices averaged $19.70 per cwt, up $2.30 from July 2023. All-milk prices are reported monthly by the USDA National Ag Statistics Service (NASS). The all-milk price is the estimated gross milk price received by dairy producers for all grades and qualities of milk sold to first buyers before marketing costs and other deductions. The price includes quality, quantity and other premiums, but hauling subsidies are excluded.
  • August 2023 mailbox prices for selected Federal Milk Marketing Orders (FMMOs) averaged $18.95 per cwt, up $2.34 cents per cwt from July. The mailbox price is the estimated net price received by producers for milk, including all payments received for milk sold and deducting costs associated with marketing. Mailbox prices are reported monthly by the USDA’s Agricultural Marketing Service (AMS) and generally lag all-milk price announcements by a month or more.

Among major states, the difference in the August all-milk and mailbox prices was largest in Florida, Georgia and Texas, in a range of -$1.48 to -$1.89 per cwt.

Coming up

Check the Progressive Dairy website for updates on these reports:

  • The USDA’s Crop Production and World Ag Supply and Demand Estimates reports are released on Dec. 8, providing updated forecasts for milk production and prices, as well as beef prices and feed costs.
  • U.S. agricultural export data is also released late this week, estimating October global sales of dairy products.
  • November 2023 FMMO pooling estimates, uniform prices and producer price differentials will be released on Dec. 11-14 and summarized by Progressive Dairy on Dec. 15.