By Guy Page
Good news for dairy farmers, bad news for consumers – the wholesale cost of milk will surpass $20/hundredweight (cwt) during 2022, the U.S. Dept. of Agriculture projects.
The projected combined cost for all classes of milk in 2022 is $20.75, according to a Dec. 15, 2021 USDA projection. That’s an increase over $18.24 in 2020 and $18.60 in 2021.
Prices are rising because production has fallen, the USDA said. The number of U.S. milk cows has continued to decline each month since June 2021.
Year-over-year growth in milk supply was low in August and September and fell below the previous year in October. Based on recent data, U.S. milk production forecasts have been lowered for 2021 and 2022.
With lower anticipated milk supplies, price forecasts are higher for 2021 and 2022. The all-milk price for the fourth quarter of 2021 is projected to average $20.45 per hundredweight (cwt), an increase of $0.45 from November’s forecast. For the year, the all-milk price forecast is $18.60 per cwt, an increase of $0.10 from the previous projection.
The cost of production of milk, however, is higher in Vermont ($16.87) than the national average $13.22 (2020 statistics). Only Maine and Illinois had higher milk production costs in 2020.