After Record Setting Milk Prices in 2014, Over Saturation and Troubled World Relations Forecast a 2015 Bust
Wednesday, January 21st, 2015 -- 9:32 AM
-In 2014, farmer saw record setting milk prices, but experts say farmers should get ready for a swift decline in 2015.Looking at last year, 2014 saw some of the best milk prices and they also had a great year for cheese and butter. This allowed farmers to get ahead on their finances and restore their balance sheets.
But, looking ahead to 2015, because of the increased demand in milk and milk products this last year, farmers increased their herds and pumped more milk from their cows. This has over saturated the market and milk prices are already falling. To make matters worse, China pulled back on imports after stockpiling milk powder and Russia has halted trade with the U.S. The milk price forecast is expected to fall as low as $18 cwt. and average $5.50 lower in 2015 compared to 2014.
To make matters worse, looking at the world as a whole, the U.S. is the 3rd largest exporter in dairy products. As our price on butter, cheese and milk begin to climb, other major exporters, like New Zealand and Europe, have prices going down. This will cause the U.S. to lose out on sales of milk and dairy products to other countries as they purchase from countries with cheaper prices.
Feel free to contact us with questions and/or comments.