Dairy Economics 2023

Dairy Economics 2023

Lorrie Boyer
Lorrie Boyer
Reporter
Chris Galen, senior vice President for membership services and strategic initiatives at the National Milk Producers Federation expects 2023 to not be bad, but not as good as six months to a year ago.

“The good news is that input costs have really retreated to a large extent. I mean, corn is not what it was two or three years ago, but it's not what it was a year ago. So if you're feeding corn, soybeans, hay- key feed ingredients for dairy cattle, it's not quite as bad and it's still elevated, though. I mean, you still see evidence of inflation, you know, that obviously, gas diesel fertilizer aren't as high as they were six months ago, but they're still somewhat elevated. So the cost of making milk is still elevated. And at the same time, the price of milk that farmers get is certainly going to be several dollars per hundredweight less.”

Galen says margins won't be what they were last year. And questions still remain.

“Are we going to see a recession? A lot of economists six months ago said by no means are we going to avoid a recession with the Federal Reserve raising these interest rates? We're gonna definitely see an economy-wide recession as we get into 2023. Well, there's not really a lot of evidence of that yet. Certainly interest rates are still high cost of money is high, but unemployment rates very, very low. A lot of people have jobs for young people making money to spend. So we haven't seen a recession yet.”

He says if milk meat and beef prices collapse, then we will be talking about a very difficult situation.

Previous ReportDairy Economics 2023
Next ReportDairy Economics 2023