Four states are driving the U.S. herd decline
Since 2018, the U.S. has experienced three extended periods of dairy cow liquidation. From January 2018 to July 2019, the national herd constricted by 118,000 cows; from May 2021 to January 2022, cow numbers shrunk by 140,000; and from March 2023 to the most recent August data, the cow population has fallen by 54,000 head.
Unlike the first two instances noted above, the recent decline has occurred even as a majority of the top 24 dairy cow inventory states have maintained or slightly grown cow numbers. In fact, just four states (California, Kansas, New Mexico, and Texas) have accounted for a larger decline than the entire U.S. during the past five months.
How have so many important dairy states managed to navigate the weak margins experienced throughout most of 2023 without yet reducing their herds? Though the complexity of the U.S. dairy industry and the numerous factors that make the economics of milk production different for every state make it impossible to give a simple answer to this question, the Dairy Margin Coverage (DMC) program could be playing an important role.
October 12, 2023