12/29/05 More milk, lower prices in 2006

Washington Ag December 29, 2005 Dairy producers are expected to keep increasing production in 2006 just as they did this year. And Gerald Bange, USDA's Outlook Board Chairman, says that's despite a forecast that the all-milk price could fall by a $1.40 a hundredweight from $15.15 to $13.75. Bange: "Even though we expect a somewhat lower price in 2006 dairy producers have been seeing pretty attractive returns, pretty attractive grain prices. They have been seeing pretty attractive forage supplies and prices. Hence we are expecting this expansion to continue into 2006." Meanwhile, USDA recently announced its decision to adopt an amendment to the Pacific Northwest and Arizona-Las Vegas milk marketing orders. It would subject producer-handlers to the pooling and pricing provisions of those milk marketing orders if they have more than three-million pounds of sales in an individual federal order marketing area. Proponents of the change say its means large producer handlers will become fully regulated and will no longer have a pricing advantage in the marketplace. USDA will conduct a producer vote on the changes. I'm Bob Hoff.