Inflation's Effect on Consumer Purchases and Dairy Farm Expansions
Katelyn Walley, Business Management Specialist and Team Leader
Southwest New York Dairy, Livestock and Field Crops Program
This month's commentary is brought to you by Katelyn Walley-Stoll's work on a "Diversify Your Dairy" project funded by NERME. Understanding, and responding to, dairy markets is a key component to your farm's risk management strategy. This material is based upon work supported by USDA/NIFA under Award Number 2021‐70027‐34693.
June's Milk Production was up by just 0.3% from 2021.New York saw a decrease of 7,000 head from 2021 to 2022 and a just a 1% increase in milk production per cow. Typically, we see a chain reaction when milk prices are high. Prices go up —> farms add cows —> milk production goes up —> prices go down. However, as we're seeing currently, year over year milk production increases of less than 1-2% can indicate strong or rising milk prices.
Today's continued slow growth is likely caused by continued economic concerns brought on by the pandemic, high input prices, labor shortages, and succession planning concerns. We're also still seeing many milk cooperatives deploy milk production controls like quotas, discounted milk sales, and tiered pricing which penalizes growth and maintains steady milk supplies.
We're starting to see a bigger response to inflation which is driving down dairy products purchases and prices. USDA market contacts report slight changes in consumer buying habits of higher costs products (yogurt, cheese). NMPF reports a decrease in overall domestic dairy product use and very recent retail dairy price hikes. Inflation on actual dairy products is historically uncommon, but rising prices for other consumer goods force buyers to make decisions which lead to decreasing dairy consumption.
Contrary to a slowly declining domestic market, the US continues to be competitive on an international level with strong export prices. US Dairy exports (by total milk solids production) hit a new record of 19.4% in May. Buttermilk, cheddar cheese, and American-type cheeses saw the biggest gains in export volume from 2021 to 2022.
USDA raised most of its price outlooks for 2023, citing higher cheese price projections, lower expected milk production, and strong exports.
More Information:
ï‚· Livestock, Dairy, and Poultry Outlook: July 2022 from USDA Economic Research Service Situation and Outlook Report.
ï‚· Dairy Market Report from National Milk Producers Federation.
ï‚· July Milk Production Report from NASS.
ï‚· USDA Foreign Agricultural Service: Dairy World Markets and Trade.
ï‚· AFBF Market Intel Report
This month's commentary is brought to you by Katelyn Walley-Stoll's work on a "Diversify Your Dairy" project funded by NERME. Understanding, and responding to, dairy markets is a key component to your farm's risk management strategy. This material is based upon work supported by USDA/NIFA under Award Number 2021‐70027‐34693.
https://nydairyadmin.cce.corne...
Field Crops
Dairy
Business
Livestock
Grains
Upcoming Events
Crops, Cows & Critters - Southwest New York Dairy, Livestock & Field Crops Newsletter Sponsorship
December 19, 2025
Our two forms of publications feature research-based and timely information from our four specialists, listed to the right, along with local event notifications and Cornell University outreach. This information is provided to participants who range from dairy, livestock, and field crops producers to agricultural suppliers and consultants.
Weekly Email Update: Shared with 625+ households who have signed up with our program.
Monthly Paper Mailer: To reach our stakeholders and farmers who lack internet access, we send out a monthly mailer where your company's logo and contact information would be featured with a mailing list of 330+ households.
If you sponsor our weekly and monthly publications you reach approximately 955 households.
Visit our website to view our newsletters!
2025 Cornell Food Beverage & Animal Feed Manufacturer Survey
December 19, 2025
Industry and Educational Advocates for New York State's Food, Beverage, and Animal Feed Manufacturing industries:
As you know, NYS has a diverse food and beverage manufacturing industry, in both the types of industries that exist and the wide distribution of firms by scale. Many manufacturing firms have strong backward linkages to agricultural production sectors in the state that support both farm-level and downstream food industry firms and consumers. In collaboration with the New York State Department of Agriculture and Markets, a team from Cornell University's Charles H. Dyson School of Applied Economics and Management has recently rolled out the 2025 New York State Food, Beverage, and Animal Feed Manufacturer Survey. The industry will benefit from an updated assessment of the industry that informs private and public investments and opportunities to support firm growth and improved profitability.
Cornell Organic Field Crops & Dairy Conference
March 6, 2026
Waterloo, NY
Farmers, researchers, educators, and agricultural service providers from across the Northeast are invited to the 2026 Cornell Organic Field Crops & Dairy Conference, held Friday, March 6, 2026, from 8:00 a.m. to 4:30 p.m. at the Lux Hotel & Conference Center in Waterloo, N.Y.
Co-hosted by New York Soil Health and Cornell CALS, the annual conference brings together leaders in organic grain, dairy, and livestock systems to share practical tools, new research, and farmer-tested strategies to support resilient and profitable organic production.
Announcements
No announcements at this time.