Each year, Farm Credit East hosts a Dairy Outlook webinar to inform farmers of the latest trends in the dairy industry and to review statistics from the past year. Christopher Wolf, the E.V. Baker Professor of Agricultural Economics at Cornell University, led this year’s discussion reviewing the U.S. dairy market data from 2024 and to discuss the coming year.

Wolf went through the 2024 U.S. price statistics, stating that the industry “started off with some pretty low milk prices.” By the second half of the year, “the margins were pretty healthy.”

It’s good to note that Class IV has been “a consistently strong market for the last few years,” with the prices remaining relatively stable throughout 2024. When compared to the rest of the world, in November 2024, U.S. milk prices were lower than those in Europe but higher than those in New Zealand.

When looking at milk production throughout the U.S., it was “essentially flat for 2024” but, more importantly, “components were not.” The average butterfat test was record-high, reaching 4.2% in 2024, mostly due to improvements in genetics, nutrition and management.

As of December 2024, the number of American milking cows had increased by 20,000 since 2023, weekly dairy cow slaughter was down almost 12% and the slaughter cow price has been going up for the last four years.

The number of dairy products in stocks/storage in the U.S. have changed throughout the years. Butter stocks have remained stable from 2023 to 2024, nonfat dry milk stocks have increased and natural cheese stocks were “7.2% below the 2023 cheese stocks.” Considering the U.S. doesn’t produce as much dry whey as it used to, the dry whey stocks have gone down “almost 19% year over year” but the “dry whey prices have been strong.”

In terms of volume, U.S. dairy exports have been relatively flat in the past year, but exports to China have decreased. Currently, 43% of U.S. dairy exports, by value, go to Mexico and Canada. In 2023, all U.S. exports totaled at $3.054 trillion, with ag exports contributing $173.5 billion, and dairy exports alone at $8 billion (4% of all U.S. ag exports).

Once the 2024 U.S. dairy industry data were reviewed, Wolf mentioned a few factors for dairy farmers to watch in 2025. These included trade issues, the domestic economy, new plants coming on line, disease, labor and weather. Wolf stated how, in 2025, corn price is expected to increase to $4.74/bushel, soybeans to $10.03/bushel and soybean meal to $306/ton. He estimated that milk prices in 2025 will reach $21.61/cwt. for all milk, $19.11 for Class III and $20.55 for Class IV.

To finish off this presentation, Megan Clancy, the dairy and livestock risk management specialist at Crop Growers, explained how “dairy risk management … can help with market volatility.” One of the hardest parts of risk management is “finding the right combination of tools … that really align with your business and your goals.” These tools should be used to build resilience, create a strong foundation for your business and provide a financial safety net to ensure consistent cash flow.

Clancy recommended various milk protection price tools, including the Dairy Margin Coverage Program, Dairy Revenue Protection Insurance, Livestock Gross Margin-Dairy Insurance and creating forward contracts. Risk management programs will be different on every dairy farm, based on their financial plans and current business risks.

As the year goes on, make sure to continuously update your business plan and monitor and review your risk management plan.

USDA continuously provides World Agricultural Supply & Demand Estimates (WASDE) reports, which are available at usda.gov. Visit their website for the most up-to-date estimates for the entire ag industry.

by Kelsi Devolve