U.S. Milk Production Expecting Slower Growth Rate this Year

While U.S. milk production is expected to grow this year, according to Michael McConnel of the USDA’s Chief Economist Office. He adds the third and fourth quarters of 2023 showed some contraction, indicating a slower growth rate in 2024.

“Overall, we see milk production projected to continue growing but at a decreasing rate from what we've seen in recent years. Feed prices are projected to be lower in the upcoming year, but we're expecting tighter global markets for dairy products, which is going to provide price support and, as a result, we're expecting to see a fair amount of price competition in the upcoming year as both domestic and international users compete for products that are in relatively tighter markets.”

The good news for U.S. dairy farmers is it will cost less to feed their animals in 2024.

“The outlook for feed markets is for lower prices in 2024 and 2025. This should be supportive of the margins of milk producers overall. In 2023, we saw a sharp decline in the milk-feed ratio, and it was the lowest level we had seen going all the way back to 2012. Later on, in 2023, we saw it begin to recover a bit as lower feed prices came to market. But generally speaking, we're expecting feed prices to abate a bit in 2024.”