Lower increases in U.S. milk production, a boost in dairy exports and the recent heat wave may all work together to keep milk prices near that $20.00 level through the end of the year. That's according to this month's Dairy Situation and Outlook report by Dr. Bob Cropp, professor emeritus with the University of Wisconsin-Extension. He says the USDA's milk production report for June showed the smallest relative increase so far this year compared to year ago levels–with most midwestern states, such as Wisconsin, Illinois, Indiana, Iowa and Minnesota, showing decreases in production.
"The July Class III price will be above $21.00 compared to just $13.74 last year," Cropp predicts. "The July Class IV price will be near $20.65 compared to $15.75 a year ago. These could be the high prices for the year, but may be not. The fairly wide spread summer heat now being experience is likely to effect milk production, especially if it continues for several days. So August prices may actually hold near these levels."
He says Class III dairy futures have strengthened with prices not falling below $20 until October and below $18 until December. Class IV futures don't fall below $19 until October. Dr. Cropp notes that we could end the year with Class III averaging near $18 compared to $14.41 last year and Class IV averaging near $19 compared to $15.09 last year.
To read the rest of the story, please go to: Wisconsin Ag Connection
