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Ag economist outlines areas to watch in the dairy sector  

Demand for dairy has been cooling in the second half of 2022 at the same time milk production numbers have started to rise.  A dairy economist says that could flip in the year ahead.

Nate Donnay with StoneX tells Brownfield 56,000 dairy cows were added to the herd in the spring and the rest of the production growth has been tied to milk output.

“But our expectation is given where the input costs are, given how much milk prices have pulled back, we’re going to see the national dairy herd flat to a little bit lower over the next 12 months,” he forecasts.

Donnay says butter consumption in 2022 will be an area he continues to follow.

“Butter prices did hit a new record high and that has fed down to retail pricing so retail butter prices have been at record highs this year and we’ve seen consumers shifting away from butter and moving toward margarine and other substitutes,” he says.

Milk production started the year down 1.6 percent year over year, now it’s up 1.3 percent as of November.