According to Ben Buckner, Chief Grain and Dairy Analyst at AgResource Co., dairy producers will see lower feed prices in 2023 and continued strong milk prices. He credits high domestic consumption of dairy products, strong dairy exports and no increase in the U.S. dairy herd size. “The next eight to 12 months will be bullish for dairy prices, while the feed markets will be neutral to bearish,” he said during a recent Professional Dairy Producers Dairy Signal webinar.
Buckner said U.S. dairy demand is very good. “It is likely to stay intact as competing dairy export markets are very expensive,” he noted. “I think there is a lot of disposable income to work through before we see restaurant traffic slowing.”
According to Buckner, the milk market needs to encourage the U.S. dairy industry to expand. “It’s difficult to see how we build cheese, butter and whey inventories,” he said. “I don’t think we will see that until both hemispheres produce more milk year-over-year for an entire year. I think that is unlikely to happen in the next year.”
Buckner said a lot of U.S. dairy producers are hesitant to expand their dairy operations due primarily to high labor costs and uncertainty about interest rates. He noted that feed supplies could be improving by mid-2023 and that U.S. corn is still very much overvalued compared to competing export markets.
EDITOR’S TAKE:
This is a very optimistic report, especially since the dairy industry has seen its fair share of ups and downs in recent years. It is especially encouraging to see analysts like Mr. Buckner calling for expansion of the dairy herd to meet the demand for cheese, butter and whey. The dairy industry must be cautious, however, since it could very easily tip the scales to overproduction and lower prices. That said, it appears 2023 will be another good year for dairy producers in the U.S. That means there is no time like the present to put your name and inventory in front of dairy farmers in your area. What better way to target them than AgTruckTrader.com. And remember, CAD will be putting lots of promotional efforts behind getting farmers/ranchers to go online to AgTT in 2023!
