First benchmark of 2023 drops $1.07

e Agriculture Department announced the January 2023 Federal order Class III benchmark milk price at $19.43 per hundredweight, down $1.07 from December and 95 cents below January 2022, lowest Class III price since December 2021.

e January Class IV price is $20.01, down $2.11 from December, $3.08 below a year ago, and the lowest Class IV price since December 2021.

Friday’s Class III futures portend a February price at $17.92; March, $17.73; and April at $18.04, with a peak at $19.96 in October.

It’s not news to dairy farmers that pro tability is tightening. e Agriculture e index is based on the current milk price in relationship to feed prices for a ration consisting of 51% corn, 8% soybeans and 41% alfalfa hay. In other words, one pound of milk would purchase 1.84 pounds of dairy feed of that blend. e All Milk Price average fell to $24.70 per hundredweight, down 90 cents from November, but was $3.00 above December 2021. e December national corn price averaged $6.58 per bushel, up 9 cents from November and $1.11 per bushel above December 2021. e December cull price for beef and dairy combined averaged $76.90 per cwt., down $1.50 from November, after dropping $5.70 the previous month, but is $7.80 above December 2021, and $5.30 above the 2011 base average.

Department’s latest Ag Prices report shows the December milk feed price ratio dropped to 1.84, down from 1.93 in November, lowest since September, and compares to 1.96 in December 2021.

Soybeans jumped to $14.40 per bushel, up 40 cents from November, after gaining 50 cents a month ago, and were $1.90 a bushel above December 2021.

Alfalfa hay averaged $269.00 per ton, up $2 from November, after dropping $14 per ton the previous month, and is $52 per ton above a year ago.

Quarterly milk cow replacements averaged $1,720 per head in January, down $10.00 from October, but $340 above January 2022. Cows averaged $1820 per head in California, down $30 from October, but $490 above a year ago. Wisconsin’s average, at $1,810 per head, was down $30 from October, but $340 above January 2022.

Dairy economist Bill Brooks, of Stoneheart Consulting in Dearborn, Missouri, says the gain in feed costs o set the highest ever December All-Milk price and dropped the income over feed from the previous month. Income over feed costs in December were above the $8 per cwt. level needed for steady to increasing milk production for the fteenth month running. Soybeans and alfalfa hay set new all-time record high prices in December and all three commodities were in the top two for December all time.

Feed costs were the highest ever for the month of December and the fth highest all time. e All-Milk price was in the top twenty at the fourteenth highest recorded.

Milk income over feed costs for 2022 are $12.21 per cwt., according to Brooks, a gain of 4 cents per cwt. versus the previous month’s estimate. 2022 income over feed was above the level needed to maintain or grow milk production and $4.42 per cwt above the 2021 level. e farm milk spigot slowed a bit in December. e Agriculture Department’s preliminary data has December output at 18.93 billion pounds, up 0.8% from December 2021. e 24-State total, at 18.1 billion pounds, was up 0.9%. Revisions lowered the 50-State November total by 46 million pounds to 18.2 billion, up 1.0% from a year ago, instead of the 1.3% increase originally reported.

December cow numbers totaled 9.4 million, down 8,000 head from the November count which was revised 12,000 head lower. e December herd was up 27,000 head from a year ago but the small- est since February. e 24-State head count was up 38,000 from a year ago and the smallest since June. Output per cow averaged 2,014 pounds, up 9 or 0.4% from December 2021. California output, at 3.5 billion pounds, was up 0.3%, after slipping 0.7% in November. Cow numbers were up 5,000 from a year ago and output per cow was unchanged. Wisconsin output at 2.7 billion pounds, was up 0.6%, following a 1.3% increase in November. December cow numbers were down 5,000 but output per cow was up 20 pounds in the Number 2 milk producer.

Texas, secure in its Number 3 milk producer position, was up 3.3%, thanks to 25,000 more cows o setting a 15 pound per cow drop. Florida registered the biggest loss, down 12.7%, on 13,000 fewer cows and 5