USDA expects reduced milk supplies and prices

The USDA expects milk production declines this year because of reduced cow output but left the herd size unchanged.

Highground Dairy economist Betty Berning tells Brownfield she expects dairy farmer margins to remain tight this year.

“There aren’t a lot of heifers in the countryside and the herd size itself isn’t really big,” she says. “Producers are going to be pretty conscientious as they go about making culling decisions just to try to get the herd back to a more normal size and optimize their assets.”

In the latest supply and demand report, the USDA raised its butter price forecast because of continued strength in demand.  Cheese, nonfat dry milk, and whey prices were lowered because of recent low prices. 

The Class III price was reduced because of lower cheese and whey price forecasts.  Class IV prices were raised as higher butter prices are expected to more than offset lower nonfat dry milk prices.

The all-milk price for this year was lowered by 35 cents to $20.90 per hundredweight.

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