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Will Growth Even be Possible for Dairy Producers this Year?

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With growth on the mindset of many producers, the question then turns to how quickly can cow numbers increase. Lucas Fuess, a senior dairy analyst for RaboResearch Food & Agribusiness, says we are now in a far different state as producers have kept fewer replacement heifers and the milking herd numbers are the lowest they’ve been in four-plus years.

“I think that there is very limited ability to increase cow numbers to kind of meet that,” he said to the attendees at the High Plains Dairy Conference in Amarillo, Texas. “Traditionally as profits go up, we would see cow numbers go up and we would see milk production respond to capitalize on that. We could be kind of working ourselves into a situation where it’s kind of bullish because prices are rising and we’re not able to improve supply that we traditionally have.”

Dan Basse, an economist with AgResource Company, doesn’t think heifer replacement numbers are going to change anytime soon.


“I’m still amazed at that [beef] cross calf that sells at $700 or $800, but $300 for a Holstein bull calf,” he says, explaining that heifer numbers are going to stay tight, especially with strong cull and beef prices sticking around.

Michael Dykes, CEO of International Dairy Foods Association (IDFA), shared at the 2024 International Dairy Forum earlier this year that our industry has a growth mindset.

“Our farmers want to grow; our processors want to grow. And if we aren’t growing, if we aren’t looking toward the future, we’re going to get surpassed by others,” he says, sharing that he wholeheartedly believes U.S. producers will fill the upcoming processing needs.

Phil Plourd, president of Ever.Ag Insights, says that while there is growth in the pipeline for new processing capacity, some cheese plants are in the wrong place or not as efficient as they could be.


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“They’re not making their best product in the best area,” he said.

Ultimately to know where the best sustainable production growth can occur requires one main ingredient—water. Basse says he believes that the plains area, like South Dakota, is going to continue to expand in terms of cow numbers.

“I think sustainability is more efficient here in the middle of the country”, he says.

Rick Naerebout, CEO of Idaho Dairymen’s Association Inc., shares that producers are facing several pressure points operating their dairy business model and doesn’t believe growth can happen quickly.


“This is the first time in almost two decades that producers are trying to restructure debt,” he says. “When it comes to weathering storms, land is always appreciated. So, they’d get into a pinch, and they would go out and take out more loans to clean up the short-term debt with 3% and 4% interest. You cannot do that today without doubling your costs.”

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