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Economist doesn’t expect much improvement in ’24 dairy prices

An agricultural economist says he’s expecting another tough year for dairy producers in 2024.

Leonard Polzin with the University of Wisconsin tells 2023 needed more consumer demand to lift prices, and he expects the first quarter of the new year to be challenging. “We’re coming into a seasonal slump, so as we look to January, February, historically those prices are generally less, especially coming off of the proverbial holiday hangover where everybody has already had all of their cheese and butter from Thanksgiving and Christmas.”

Polzin says he will be watching first quarter numbers closely. “Keep inventories low, make sure we’re not building too much product, make sure consumers are consuming. That’s really going to be what we’re looking for if we’re going to be looking for that raise in prices and the price support stability as we look into the first quarter of next year.”

Polzin says butter has been the good news story, helping support dairy prices in 2023. “Part of that, too, is we’re seeing some support in the whey market as far as moving product out, so that’s terrific, however, in the whey complex, I think there’s still a lot of changing dynamics in there. There’s a lot of purchasing internationally that is changing at the moment.”

Polzin says with expected tight margins in 2024, farmers should take advantage of the farm bill extension and sign up for the Dairy Margin Coverage program once USDA opens the program for enrollment.