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Cattle prices encouraging dairy culling

A dairy economist says higher cattle prices have helped motivate dairy farmers to reduce their cow herds.

Vice President of Global Operations and Insights Alyssa Badger with Highground Dairy tells Brownfield U.S. milk production declines showed up earlier than expected in USDA’s latest report.

“Farmers have just not been profitable, break-even costs here in the Midwest are around $18.00 per hundredweight,” she says.  “We saw the July futures contract dip as low as having a $13 handle in front of it, so you can imagine how bad those margins are.”

New Mexico and Texas had the largest declines in milk production during June with nearly 60,000 fewer cows compared to last year.

“They’ve just been experiencing high heat and cow discomfort, as well as some feed shortages throughout the country,” she explains.  “We are seeing a lot of those cows move out of the states and into other states that have better access to feed, more affordability.”

Badger says milk futures have likely hit their bottom for the year and should gradually improve in the second half of 2023.