Milk Prices May Continue Strong into 2020
Saturday, October 26th, 2019 -- 9:15 AM
(Wisconsin Ag Connection) -Continued small increases in milk production across the country, along with favorable butter and cheese sales, an uptick in dairy exports, and tighter dairy product supplies have all supported higher milk prices this year.That's the assessment of Dr. Bob Cropp with the University of Wisconsin-Extension. In his monthly Dairy Situation and Outlook report, the professor emeritus said the Class III milk price has risen nearly $6 per hundredweight since it's yearly low in February. "We can expect some further price strengthening for November before some drop off for December," Cropp noted. "For the year, the Class III price could average around $16.75 compared to $14.65 last year and the Class IV price around $16.30 compared to $14.65 last year." The summary further claimed that lower dairy exports to China, Japan and Oceania have been partially offset with higher exports to other Asian countries.
Cropp says other market indicators are showing the price of milk trending higher in 2020, particularly because the poor growing season will result in less quality feed, thus causing milk per cow output to fall. "With a wet spring, summer and fall which delayed corn planting and made harvesting quality forages a challenge will likely dampened increases in milk per cow," he said. The retired professor says he can see a scenario in which the Class III price would average in the strong $17 range for the first half of the next year and going another dollar higher by the second half.
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