STARKVILLE, Miss. ( WJTV ) – Despite encouraging milk prices, officials with the Mississippi State University (MSU) Extension Service said margins still project to be tight for Mississippi dairy farmers in 2024.

The latest World Agricultural Supply and Demand Estimates report from the U.S. Department of Agriculture forecasted this year’s average all-milk price at $21.60 per hundredweight nationally. Josh Maples, an agricultural economist with the MSU Extension Service, said this is an improvement from last year, but still below 2022 levels, when prices hovered around $25 per hundredweight.

“Demand for dairy products in the U.S. and globally is strong in 2024,” Maples said. “Dairy prices have been stronger in 2024 and are expected to get higher. Cheddar cheese, dry whey and butter prices are all expected to be stronger in 2024 than a year ago. Both imports and exports are expected to be higher than in 2023.”

Maples said inputs remain a key challenge for dairy producers, even in a positive market.

“The milk price is an important indicator of the overall dairy industry, but whether any particular farm will be profitable depends heavily on cost of production, which has been a significant challenge in recent years,” he said. “Feed costs have come down slightly overall as corn prices have moderated, but many of the other costs such as equipment, insurance, labor and interest expenses on operating loans have continued to show increases.”

High costs are just one factor in driving the decline of milk production across the Southeast. According to the Dairy Alliance, an advocacy organization for the dairy industry in eight Southeast states, there are 48 dairy farms in Mississippi with an average herd size of 150 milking cows, totaling 6,000 dairy cows in the state. In 2022, the state had 55 dairy farms with an average herd size of 145, for a total of about 8,000.

According to officials, the U.S. dairy industry remains on alert more than three months after the USDA first confirmed detections of Highly Pathogenic Avian Influenza, or HPAI, in dairy herds in Texas and Kansas.

As of June 26, 10 other states and a total of 126 dairy herds had reported outbreaks, according to the Centers for Disease Control. Mississippi is not one of the states . H5N1, the strain of HPAI being detected, is highly contagious and can occur naturally in wild aquatic birds and spread to farms.

Both the USDA and the U.S. Food and Drug Administration have indicated the commercial milk supply remains safe because of the process of pasteurization and the destruction of milk from sick cows. The last of three human cases confirmed after exposure to dairy cows was reported in May.

“HPAI is certainly a concern and is garnering much attention,” Maples said. “However, there have been relatively minimal impacts on dairy production and prices so far. Milk production has not been drastically impacted yet, and dairy prices have generally increased. This will remain an issue to watch, though, as it continues to unfold.”

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