The 2022 Northeast Dairy Farm Summary and 2023 Mid-Year Outlook indicated that 2022 was a remarkable year for the Northeast dairy industry. This year’s report also includes dairy market outlooks from four prominent dairy economists; Christopher Wolf, of Cornell University, discusses federal dairy policy; Rob Fox, of CoBank, covers dairy retail markets and exports; and Marin Bozic and Brian Walton explore key trends in dairy markets as well as risk management strategies for a volatile marketplace.
Highlights of the 2022 Northeast Dairy Farm Summary and 2023 Mid-Year Outlook
- Net earnings for our sample of 139 Northeast farms increased to an average of $945 per cow in 2022,1 from $374 per cow in 2021.
- Total costs increased significantly, rising by 25% from 2021 to 2022. Total expenses per cwt. increased by $5.31 per cwt. to $26.81 in 2022.2
- Net cost of production3 (NCOP) increased to $22.87 per cwt., $4.27 greater than 2021.
- Some specific cost categories which changed in 2022 are:
- Feed expense, a farm’s largest cost, increased from $1,782 per cow in 2021 to $1,992 per cow in 2022.
- Fuel expenses increased by 78% per cow as fuel and oil prices rose substantially from the prior year. The milk hauling assessment subsequently increased as well.
- Productivity decreased slightly. Per cow production in our sample herds was 4.1% below the prior year. Milk sold per worker decreased 6.6% due to fewer cows per worker, as well as lower per-cow production. These changes appear largely due to shifts in the makeup of our sample rather than decreases among individual farms.
- Cash flow was sufficient, on average, to meet financial commitments (e.g., operating expenses, debt repayment, family living and income taxes), resulting in an average cash margin (excluding government payments) per cwt. of $6.43.4 This is the largest cash margin, in nominal terms, in the history of the DFS. Many farms used these funds to reinvest in their businesses.
- Percent net worth in our sample increased to 69%. Both average assets and liabilities increased. Total debt-per-cow increased from $4,672 to $5,200.
2023 Mid-Year Outlook
Read outlook articles from four prominent dairy economists:
- 2023 Dairy Market and Policy Outlook by Christopher Wolf, Cornell University
- Higher Food Inflation, Slowing Economy Dampen Dairy Demand by Rob Fox, CoBank
- Review of 2022 and a Look Ahead by Dr. Marin Bozic and Brian Walton, Bozic LLC
1On an accrual basis, after family living, not including nonfarm income.
2Including family living.
3Total farm expense, plus family living, less non-milk income. For more information, see page 8.
4See figure 7.
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