Dairy Industry Snapshot

• August U.S. milk production decreased 0.3% from August 2022. The national dairy herd decreased by 15,000 head from the prior year, production per cow was flat. 

• On a state-by-state basis, in August, there were Y-O-Y increases in production in some major producing states, including, Idaho (1.0%), Michigan (3.7%), and Wisconsin (1.2%). Notably, California (-3.7%), Texas (-3.2%) and New Mexico (-8.0%) showed declines. In the Northeast, New York (3.8%) Pennsylvania (0.5%), and Vermont (0.9%) had increases.⁴  

• Milk prices have declined considerably from their highs in 2022. Boston Blend price averaged $20.17 in August, down substantially from the peak of $26.36 in 2022. Prices are expected to run in the low $20’s for the rest of 2023, and average $19.78 for the year. 

• Input costs have risen, tightening margins for dairy producers. Labor, feed and other costs have risen significantly over the last two years, and while milk prices have declined significantly, input costs have generally remained elevated. While many producers entered 2023 in a good cash position, they are likely working through their savings to cover increased costs. 

¹ Agri-Mark Price Forecast
² Upstate Niagara Price Forecast
³ USDA World Agricultural Supply and Demand Estimate (WASDE)
⁴ USDA NASS Milk Production Report