2024 has been a roller coaster year for the dairy industry. The year started with low prices, and continuing financial problems that began in 2023. But, price recovery by mid-year spurred some profits and herd growth.
Low prices led dairy farmers across the country to reduce the number of milk cows in 2024. Dairy cow numbers bottomed out in July at 9.319 million head. That was the fewest since February 2016. Milk production per cow actually declined, year-over-year, which is a historical rarity. The combination of fewer cows and less production per cow led to lower milk production than the year before in 5 of the first 6 months of 2024.
Strategies to cut production in response to low prices have led to very tight supplies of replacement heifers. Replacement heifer prices, for those looking to buy, surged to record highs late in 2024. For example, springer heifers hit $2,700 per head in early December at the Smiths Grove Kentucky dairy auction.
Herd expansion due to rising prices later in 2024 was led by Texas dairies. By October, Texas’ milk cow numbers hit a record of 675,000. That was 40,000 head more than October of 2023. This herd expansion led to growing numbers in the broader Southern Plains. Dairy cow numbers continued to decline in other areas of the country. Across the Southeast, monthly dairy cow inventory is reported for Florida, Georgia, and Virginia. Compared to the previous year, Georgia and Virginia cow numbers declined by 5,000 and 3,000 head to 85,000 and 66,000, respectively. Florida cow numbers held constant at 100,000 compared to October 2023.
Dairies in the Southeast have largely been spared from HPAI. It began in late 2023 or early 2024 with a mystery illness that was identified in the Spring as HPAI. The illness led to reduced milk production and some more culling.
Reduced milk production led to higher milk prices. Cheese, butter, powder, and whey prices all increased. Weekly 40 pound cheddar cheese blocks in the wholesale market began the year at $1.53 per pound and climbed to the mid-$1.90s by mid-year, then climbed again to $2.28 per pound. The bottom dropped out after that peak, much like a rollercoaster, to $1.77 per pound at the beginning of December. Butter prices did much the same, a year-long climb to $3.19 per pound then a drop to $2.59 per pound, back to where the year began. Federal order uniform milk prices climbed to over $25 per cwt by late in the year but will start to decline reflecting the lower cheese and butter prices.
