Dairy Volatility

Dairy Volatility

David Sparks Ph.D.
David Sparks Ph.D.
I don’t know that this is fact but as I watch the dairy industry year in and year out, it seems that milk is as volatile, price wise, as any other agricultural commodity. Example, the nation's dairy herd will probably get smaller this year, the recent USDA cattle report showing replacement dairy heifers down 1 percent from a year ago. But even with fewer milk cows…” we expect about 3.7 billion pound increase in production this year.”

Up to 222 billion pounds. This from acting USDA Outlook Board Chairman Mark Jekanowski. So that would amount to about a 1.7 percent increase in the USDA milk production forecast. And what about milk price prospects compared to what the projection was a month ago?

“We pulled back our forecast for all milk price by 40 cents per hundredweight. “Taking the forecast for the average 2020 all milk price down to 1885 a hundred weight. But that would top last year's price, but only by 25 cents. Why this cut in price prospects?

“Weakness in cheese and butter prices, we’re sitting on some pretty large stocks. And prices have just been weak.

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