Strong milk prices and tighter supplies of cows and heifers again pushed U.S. average prices for dairy replacements to their highest level in more than six years, according to latest quarterly estimates from the USDA. Meanwhile, cull cow prices ended the third quarter of 2022 at the highest point since September 2015.
Replacement prices highest since 2016
U.S. replacement dairy cow prices averaged $1,730 per head in October 2022, up $20 (1%) from July 2022 and $390 (29%) more than October 2021. Although it’s the highest quarterly average since July 2016, October 2022’s average price was still 18% per head less than the last peak of $2,120 per head in October 2014.
The USDA estimates are based on quarterly surveys (January, April, July and October) of dairy farmers in 24 major dairy states, as well as an annual survey (February) in all states. The prices reflect those paid or received for cows that have had at least one calf and are sold for replacement purposes, not as cull cows. The report does not summarize auction market prices.
Despite the rise in the overall average compared to the previous quarter, prices for replacement cow prices were down in 10 of 24 major dairy states and up in just seven tracked by the USDA (Table 1).
Price movement didn’t necessarily follow state-level patterns where dairy cow numbers are changing. The largest quarterly price increases were in Georgia and New Mexico, with largest declines in Arizona, Kansas and South Dakota. In contrast, based on monthly USDA Milk Production reports, New Mexico’s cow numbers are on the decline, while South Dakota is among national leaders for growth in the dairy herd size.
Texas led all states in year-over-year growth in September 2022, up 30,000 head from a year ago, followed by South Dakota, (+25,000), Iowa (+12,000) and Georgia (+10,000). Compared to a year earlier, cow number declines were again heaviest in New Mexico and Michigan, down 16,000 and 11,000 head, respectively.
Compared to a year earlier, October 2022 replacement cow prices were up $400 or more per head in eight states, led by a $550 jump in California.
Progressive Dairy’s Cattle Market Watch tracks dairy heifer prices from about 20 auction markets throughout the U.S., with price summaries updated about every two weeks. The listings cover top and medium springers, shortbred and open heifers, and heifer calves.
Affecting prices going forward, more dairy cows are expected in the first half of 2023, growing to about to 9.425 million head.
Market cow prices rise
With a month lag, U.S. average prices received for cull cows (beef and dairy, combined) in September averaged $91.20 per hundredweight (cwt), up $1.10 from August, up $18.30 from a year ago and the highest monthly average since September 2015.
