Knowledge Exchange

Ag Economy

Dairy

Avg. Price per Cwt.

2019

2020

2021

2022 F

Boston Blend Price1

18.12

17.10

17.85

25.47

Avg. WNY Blend2

17.10

16.07

16.86

24.68

USDA All-Milk Price

18.70

18.24

18.69

25.80

 F=forecast

  • 2021 Annual U.S. milk production increased 1.3% from 2020. The national dairy herd increased by 56,000 head to 9.45 million cows. Per-cow productivity rose by 0.7% to 23,948 lbs per cow.
  • On a state-by-state basis, in 2021, there were gains in production in some major producing states, including California (+1.3%), Idaho (1.1%), Minnesota (3.7%), Texas (5.0%), and Wisconsin (3.1%). In the Northeast, New York saw a gain of 1.6%, while others saw decreases, including Connecticut (-0.9%), Massachusetts (-1.5%), Maine (-3.5%), New Hampshire (-4.2%), and Vermont (-1.4%).3
  • U.S. dairy exports continued their growth trajectory in 2021, increasing 10% by volume and 18% by value over 2020. Total value exported reached $7.8B, surpassing the previous record set in 2014.4
  • USDA ERS forecasts flat-to-declining dairy exports in 2022 due to high U.S. milk prices.5
  • The increases seen in mailbox milk prices over the last few months have been remarkable. Forecasts suggest that milk prices will remain in the $25’s through the end of the year, supporting higher-than-average profitability for dairy producers. While input costs have risen along with milk prices, notably feed, labor, fuel, and fertilizer, margins are projected to remain strong. DMC income-over-feed cost margins are forecast to average $12.07 in 2022, suggesting no payout from that program this year.
  • Long-term futures foresee some softening in milk prices in 2023, bringing the average milk price next year down by about $2 to $23.38 for the Boston Blend.
  • The NY Farmworker Wage Board voted to recommend phasing down the current 60-hour overtime threshold to 40 hours over a 10-year period. A proposed tax credit for farmers who pay overtime has been included in the 2022 state budget which may help mitigate the impact of the new threshold.

1  Agri-Mark Price Forecast
2 Upstate Niagara Price Forecast
3 USDA NASS Milk Production Report
4 US Dairy Export Council
USDA ERS Livestock, Dairy, and Poultry Outlook, December 2021