Northwest FCS Dairy Market Snapshot

Each quarter, Northwest Farm Credit Services updates more than 15 different commodities through their Market Snapshots. Northwest FCS Vice President of Market Research and Development Michael Stolp shares details from the first quarter results of the dairy Market Snapshot.

Stolp: “Northwest dairy producers’ first quarter financials results reveal varying profitability. Milk prices and high feed costs continue to challenge the industry. Producers positioned for profitability remain opportunistic; carefully evaluating choices and industry changes. Returns are expected to improve throughout 2013. Average milk prices are forecasted to increase, support by strong export markets. Feed costs may decrease driven by questions around corn prices.”

The Market Snapshot gives this additional overview: Producers’ breakeven prices vary with management, growing region and commodities produced. Generally, breakeven prices in Southern Idaho range from the high $14’s per cwt to low $19’s per cwt. In Washington, breakeven prices range from $17 to $19 per cwt. Northwest FCS’ preliminary analysis of dairy producers’ profitability reveals returns ranging from losses of $2 per cwt to gains of $3 or more per cwt. Variability is attributed to variances in feed production, milk pricing and margin management.