Dairy farmers are culling cows in large numbers, with over 68,000 cows culled in the week ended January 28, one of the highest numbers in late January since the mid-1980s. Nearly 273,000 dairy cows were culled in the first four weeks of 2023, the most in over 35 years. This is due to negative margins and is expected to limit the growth of the U.S. dairy herd in 2023. Despite this, milk production is expected to increase modestly, driven by increased milk production per cow, and mild winter weather in January. However, demand for milk is stable or lower, leading to lower milk prices, and it could take months for price recovery for dairy farmers.