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US dairy farm sees significant increase in income
The year 2024 could be a very good year for dairy farming in the US. According to some, the best year in possibly ten years. Not specifically because of the milk price, but because of what remains as margin.
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Feed prices are continuing to decline, market experts note, while the demand for dairy is increasing. In other words, one price moves down, the other moves up. Meanwhile, milk production is not growing as fast as might be expected, because quite a few calves are disappearing to beef farming. Quite high prices are offered for these calves. This also helps to support the milk price.
From premium to real margin
All these developments leave a larger margin for dairy farmers. This is also evident from the payments made from the Dairy Margin Coverage (DMC) program. Through this program, dairy farmers can ensure a minimum income, so that they still have a certain margin. The more generously they insure themselves, the higher the margin. This year, from March to June, no margin payments were made to farmers who had too little left over. Last year, payments were made in eleven of the twelve months due to a too low remaining margin between feed costs and milk yields. If the margin between feed costs and milk yield is $4,00 per 45,4 kilos (cwt/hundredweight), payment will be made from the DMC. In June that point was very far away, as a margin remained of $11,65 per 45,4 kilos
Cheese exports reach record
It is not only domestic demand that helps the milk price rise, it is also good exports, especially of cheese, according to the USDEC, among others. In March, April and May, exports rose for the first time to a level of more than 100 million pounds per month, or in other words: to more than 45.000 tons.
Investments
The American dairy industry is also looking forward to it again. Over the next two years, approximately €7 billion will be invested, mainly in new cheese factories. An important part of this is planned in the old American dairy center, in roughly the northeast of the country. The Americans also expect that they will be able to make additional good progress on the export markets in the coming years because Europe and New Zealand will have to put on the brakes more due to climate and other restrictions.