Milk output will have to drop by 3% nationally to get the needed bump in milk prices to offset higher feed costs, says University of Missouri ag economist Scott Brown.
“We need an estimated $4 lift in the all milk price to offset the higher feed costs,” he says, which would be about a 25% hike. “I anticipate higher forage costs will drive production costs even higher.
“It is sobering to realize that 2013 feed expenses very well could be three times higher than the 1990-2004 average, and over 70% above the 2007-2010 average,” he adds.
Heavy culling is already occurring. For the week ending July 21, the United States Department of Agriculture reported that 60,300 dairy cows were sent to Federally inspected slaughter plants. That’s 11,000 more than the same week last year, or a 22% increase. Year-to-date, culling is up 4.2%. Both the Midwest and Southwest regions are reporting heavier than normal culling.