Trends in Dairy Farming: A Look Ahead to 2024

LUBBOCK, TX – The year 2024 is shaping up to be pivotal for the dairy industry, marked by profitable milk prices and lower feed costs. This favorable economic environment has set the stage for a notable increase in milk supply, which is beginning to exert downward pressure on prices and has repercussions throughout the beef market.

Record Dairy Cow Numbers

As of August, the U.S. dairy cow population has surged to 9.52 million, the highest number recorded since 1993. Notably, Texas leads this resurgence with 699,000 dairy cows, marking its highest count since 1958. In response to these increasing herd sizes, dairy processors are expanding their capacity to meet the anticipated output levels.

Increased Milk Production

The productivity of cows has similarly seen a boost, with August’s milk output reaching a record 2,050 pounds per head—an increase of 1.3 percent compared to August 2024. This surge has driven a three-month production uptick of 3.6 percent year-on-year, contributing to a growing supply of dairy products.

Price Decreases and Market Effects

However, the influx of supply has led to a decline in dairy prices. Cheddar block prices have fallen between $1.95 and $1.70 per pound, roughly 30 cents lower than the previous year. Similarly, butter prices decreased from $2.50 to approximately $1.70 by mid-October, while nonfat dry milk (NFDM) is currently hovering around its low for 2025 at $1.14.

Impact on Beef Market

The decreasing dairy prices are making their way back to farmers’ mailbox checks. While beef cow slaughter rates remain lower, dairy culling has kept pace with last year’s figures since mid-year. This trend may intensify as profit margins narrow, potentially increasing culling activity unless government intervention occurs, which leaves market forces to manage the supply.

Farm-Level Insights

From a farm management perspective, it’s prudent to brace for reduced milk checks as we transition into winter. Dairy farmers should closely monitor cull-cow values and their timing while conducting thorough assessments of cash flow as the product prices undergo adjustment.

In summary, the current dynamics present both challenges and opportunities within the dairy sector, necessitating careful planning and strategic adjustments to navigate the evolving landscape.