10/23/08 Milk production expected to drop

Idaho dairy producers have seen milk prices fall recently. What about the future? I'm Bill Scott. Back with Today's Idaho Ag News in a minute. Idaho dairy operators have seen prices for milk drop recently and it looks like that trend will continue into next year says USDA Outlook Board Chairman Gerry Bange. He says part of the problem stems from the overproduction of non-fat dry milk in other countries. BANGE "The price of nonfat dry milk has come down very, very sharply. Somewhat weaker demand owing to the work economic situation right now so the demand for US nonfat dry milk has weakened." Class IV milk prices have fallen farther than expected and Bange says they could drop another eleven and a half percent next year. Cheese prices are off and the average all milk price has been revised downward. BANGE "Taking that down to $16.95 for 2009, down about eight percent from 2008." One bright note; feed and fuel prices have started to come down. Bange says the high fuel and feed costs this year will probably lead to an all-meat production decline next year, down more than one percent. BANGE "We're seeing tighter calf supplies. Calf supplies have been somewhat restricted due to drought conditions in various parts of the country." Bange says beef, hogs and broiler prices will also be down next year as well. BANGE "Some signs of weaker demand which may in fact relate to the economic situation where people are just adjusting their expenditures." Today's Idaho Ag News Bill Scott