Dairy Market Snapshot

Pacific Northwest dairy producers experienced an average start to the first-half of 2013. Although milk prices weren’t extraordinary, feed prices were manageable. Looking forward, untimely rains may push prices of limited supplies of dairy quality hay higher. Conversely, a large corn crop may drive feed grain prices lower that according to the most recent Northwest Farm Credit Services quarterly dairy Market Snapshot.
Northwest FCS Vice President of Market Research and Development Michael Stolp shares additional details.
Stolp: “Northwest dairy producers’ profit margins should improve in the second half of the year. Corn and soybean prices have remained high, but the expectation of a large corn crop in 2013 may drive feed grain prices lower. Hay prices will likely be pressured by lower corn prices, but a shortage of high quality hay should limit the extent of price declines. Milk prices are projected to remain firm, between $17 and $18 per cwt, supported by strong exports and limited increases in U.S. milk production. Prices at these levels provide profits for more efficient dairies and break-even financial results for the majority.”
The Snapshot provided the following additional overview: Northwest producers’ profitable operations are driving some dairies’ reinvestment in their facilities. Northwest FCS lending staff share news of several dairies making free stall, holding pen and parlor enhancements.