Dairy Still Floundering

Dairy Still Floundering. I'm Greg Martin with today's Line On Agriculture. The dairy industry has seen a pretty bad time in the last year or so and there are a lot of frustrations. Jim Salfer is a dairy specialist, and a little bit frustrated with dairy prices not bouncing back like he thinks they should, and with the way they bounce around quite a bit! Salfer says some producers are slowly starting to return to profitability, but there is still a long way to go. SALFER: A couple of things have happened, prices have gone up a little bit and also costs have dropped a little bit, now feed prices have come up a little bit over the last couple weeks or so. I think most dairy producers were profitable and of course that's a generalization. There's a wide range in profitability based on debt levels and management but December, January I think most producers were pulling out of the losses that we had last year and it made money and then of course I think the second quarter is going to be kind of a tough quarter again for folks but then again it looks like this fall things will turn out a little bit better. He believes some factors in the dairy market should be favoring higher prices. SALFER: It's kind of an interesting situation; if you look prices have been pretty volatile over about the last month or so. In December they started coming up and then they took kind of a drop and now they've just been bouncing around a lot and then most of the signs – if you kind of stand back and look at all the factors that affect milk production most of the signs appear that we should be having better prices. Wholesale butter prices are about the highest they've been in about 2 years maybe not quite. Powder prices are pretty high levels, they've come up really nice. Cheese prices have been bouncing around but they've moved up some. And the other thing that kind of the world situation our exports have really increased again over the last couple of months. Still, Salfer said he's optimistic that dairy prices are still going to improve in the short and long term as well. SALFER: I'm at least pretty hopeful, maybe overly optimistic that I think we kind of get through this and some of the next reports, animal numbers being down, cow numbers being down and maybe we can get this cheese inventory worked through the system. I think we're looking at better prices moving into summer and particularly in the fall. It will be interesting to see how the next few months going into summer may affect the dairy industry. That's today's Line On Agriculture. I'm Greg Martin on the Ag Information Network.