02/21/08 Milk price forecast

USDA World Outlook Board Chairman Gerry Bange sees continued dairy herd expansion in 2008. Record farm prices for milk are coming down now. USDA says milk production grew two percent last year while January milk production was up 2.4 percent. Bange's production forecast for this year is a 2.7 percent increase. BANGE "What we're seeing is continued herd expansion. We will see more dairy cows in production during 2008. We don't think that the output per cow would grow quite as much as we previously did because growing feed prices are going to begin to have an impact and likely would lessen the rate of growth and output per cow." Bange says Class III milk prices are expected to drop 12.4 percent and its due to lesser demand for whey. BANGE "When the prices per much, much higher we saw much more buying interest than we are seeing now with the lower prices but we expect that some of that buying interest will return when these stockpiles that people amassed at these higher prices begin to be worked down." The forecast for Class IV prices this year is a 16 percent drop. The all milk price to farmers grew 48 percent last year and if USDA forecasts are correct this year it will decline by about ten percent. Today's Idaho Ag News Bill Scott