Is a record all milk price enough to drive growth?

A dairy economist says the impact of rising costs will likely carry throughout herd and production trends this year despite record prices.

Nate Donnay with StoneX tells Brownfield trend line milk production growth in 2021 was a tale of two trends.

“The first half of last year the herd was increasing by 12,000 cows a month, in the second half of the year the herd was declining by 21,000 cows a month,” he says.

In the second half of the year, Donnay says added costs drove herds to limit production.

“We had a bit of a mismatch between increasing costs and increasing revenues throughout the course of the year and that led to the decline that we saw in the herd, the big slowdown in milk production”

USDA recently set the March all milk price at a record-high $25.90/cwt.

Donnay tells Brownfield that could almost incentive growth, but feed costs and other rising inputs are likely to weigh on that decision.

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