Dairy expectations in the US for 2023
Published Mar 27, 2023
Tridge summary
Tanner Ehmke, a dairy economist for CoBank, discussed the current state of the dairy industry at the 2022 World Dairy Expo. He highlighted the industry's record high milk prices in 2022 but noted that rising production costs and moderating milk prices in 2023 may lead to margin compression. Ehmke suggested that farmers can mitigate this by reducing costs and increasing efficiency.
Ehmke also noted the US dairy industry's resilience, with milk growth in 2022, driven by higher cow numbers and productivity. He discussed the trend of dairy farmers moving to areas with lower costs, which is being mirrored by cheese plants opening in these regions. Finally, Ehmke discussed the export market, mentioning concerns about the global economy and specific issues in China and Europe. Despite these concerns, he noted that the US dairy exports remain affordable compared to Western Europe and that the industry's relationship with key export markets is expected to remain strong.
Ehmke also noted the US dairy industry's resilience, with milk growth in 2022, driven by higher cow numbers and productivity. He discussed the trend of dairy farmers moving to areas with lower costs, which is being mirrored by cheese plants opening in these regions. Finally, Ehmke discussed the export market, mentioning concerns about the global economy and specific issues in China and Europe. Despite these concerns, he noted that the US dairy exports remain affordable compared to Western Europe and that the industry's relationship with key export markets is expected to remain strong.
Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.
Original content
Tanner Ehmke, dairy economist for CoBank, recently spoke to The Dairy Site’s Sarah Mikesell at the 2022 World Dairy Expo in Madison, Wisconsin, USA. 2022 was a phenomenal year for the dairy industry, with record high milk prices and production costs were still catching up, according to Ehmke. As 2023 approached, the industry saw production costs continue to rise, while feed costs have peaked and stabilized, but costs remain higher than normal and milk prices have moderated. Ehmke is anticipating some margin compression in 2023. “If you're a dairy farmer, what do you do with this outlook of potential moderation continuing into 2023 with resilient feed and labor costs?” asked Ehmke. “Farmers should have pulled as much cost as they can from 2022 into 2023 such as making advance feed purchases and extending any current contracts in an effort to deal with the margin compression in the market,” noted Ehmke. The US saw milk growth occur in 2022. The USDA milk report showed cow numbers ...
Source: The Cattle Site
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