How do USDA price estimates affect your farm?

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dairy cattle

According to the USDA National Agricultural Statistics Service Livestock, Poultry and Dairy Report released May 18, milk production in March 2021 was 1.8% higher than March 2020, and milk cow numbers were 77,000 head more than in March 2020.

Feed prices

USDA is projecting higher feed prices in 2021 and 2022. The 2020/2021 corn price is estimated at $4.35 per bushel and the 2021/2022 corn price is estimated at $5.70 per bushel. Soybean meal is expected to stay nearly even at $405 per ton in 2020/2021 and $400 per ton in 2021/2022.

USDA had the March 2021 hay price at $181 per ton, an increase of $9 per ton compared to March 2020.

Dairy forecast

USDA estimates the 2021 U.S. milking herd at 9.47 million head. Expect cow numbers to continue an upward trend into the third quarter of the year before declining in the fourth quarter, because of high feed prices.

Milk per cow, at 24,070 pounds per head, is unchanged from the previous month, but higher anticipated cow numbers has increased the milk production forecast 0.2 billion to 227.9 billion pounds. USDA is projecting Class III milk at $17.70 per hundredweight, Class IV milk at $15.75 per hundredweight and the all- milk price at $18.95 per hundredweight.

2022 dairy forecast

Because of relatively high feed prices, USDA is projecting the overall milking herd size in the U.S. to be 5,000 less than the 2021 projection. Milk production per cow is expected to increase 1.1% from 2021 to 24,335 pounds per cow.

For 2022, USDA estimates Class III milk at $16.85 per hundredweight, Class IV milk at $15.70 and the all-milk price at $18.50 per hundredweight.

Moving forward

As a dairy farmer, how will these projections impact your management?

Increasing feed prices and projected reductions in milk price will result in the need to closely monitor performance, income and expenses. Consider the following suggestions:

Review the OSU Extension 15 Measures of Dairy Farm Competitiveness publication.

View OSU Extension Dairy Resources at dairy.osu.edu.

Consult with your nutritionist, veterinarian, and Extension Educator to explore cost-saving strategies.

Enroll in and complete a financial analysis, available through Ohio State University Extension.

Review OSU Extension crop enterprise budgets available at farmoffice.osu.edu/farm- management/farm-budgets.

Meet with your family to discuss long-term plans.

Summary

Feed prices are expected to rise and milk prices are projected to decline into 2022. I encourage you to continually assess the situation, meet with your advisors, discuss options with your family and develop a plan.

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