Overall, economists are cautiously optimistic about the outlook for North American dairy in 2024, foreseeing a potential improvement over the challenges of 2023.
In the US, although dairy farmers faced difficulties in 2023 with declining milk prices and rising input costs, there is hope for a turnaround. Economist Chuck Nicholson highlights the positive impact of innovative feeding and breeding techniques, leading to increased butterfat production per cow and potentially higher profits. Moreover, expectations for robust exports and a potential rebound in milk prices contribute to the optimistic outlook. However, uncertainties such as global economic conditions, weather patterns, inflation, and federal agricultural policies could pose risks to the industry’s performance.
In Canada, senior economist Graeme Crosbie shares a similarly positive sentiment for 2024. Factors such as higher processor demand and low butter stocks set the stage for increased milk production, alongside favorable culled cow/calf prices and stabilizing input costs. The anticipated farm gate milk price increase further contributes to improved profitability for dairy farmers. However, monitoring factors like feed prices, butter stocks, retail demand, inflation, and interest rates remains crucial, with feed availability and pricing being identified as the key determinant of profitability for Canadian dairy farmers in 2024.
While challenges and uncertainties persist, both US and Canadian economists express confidence in the dairy sector’s resilience and potential for growth in the coming year.
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