Higher milk prices and lower feed costs have boosted producer optimism, but challenges remain. Highly pathogenic avian influenza (HPAI), also known as bird flu, is a growing concern, with three herds in California’s San Joaquin Valley testing positive. This region, home to 16% of U.S. milk cows, could significantly impact national milk production if HPAI becomes widespread. The USDA’s revised June Milk Production report suggests additional unreported cases may be affecting national figures. On a positive note, HPAI infections in Idaho have slowed.
Dairy markets have been bullish, with returns over feed cost for western dairies up $2.00 per cwt in the second quarter of 2024. Feed prices have generally decreased, with dairy-quality hay around $200 per ton and corn silage between $40 and $60 per ton, helping to offset financial pressures. However, some producers in Washington are under financial strain due to increased milk retains. The market for springers (cows or heifers close to calving) remains strong, with prices for bottom-end springers around $2,500 and higher-end prices nearing $4,000. Strong prices for cull cows and crossbred beef calves are providing additional revenue streams. Looking ahead, the dairy industry is optimistic, but volatility will continue. Producers should explore risk management strategies, such as Dairy Revenue Protection (DRP).
Profitability
September 11, 2024
Dairy: Breakeven profitability - Bullish 12-month outlook
Increasing milk prices and reduced feed costs will enhance profitability, however, HPAI could pose headwinds.
