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Cropp’s Dairy Outlook: milk prices decline from record levels

Prices received by Wisconsin dairy producers are expected to decline from recent record highs, according to Robert Cropp, UW-Madison dairy economist. A summary from the outlook states: “Milk prices are showing some weakness from record levels set in August but remain well above year ago levels.”

For example,”The August Class III was a record $21.67, will decline to around $18.95 for September compared to $16.26 a year ago. The August Class IV price was $20.14, will decline to around $19.65 for September compared to $16.76 a year ago.”

Additionally, the report concludes, “The rate of growth in milk production for the remainder of 2011 and the winter of 2012 is not likely to increase but ought to slow. If the rate of increase in milk production does not fall back to less than 2%, the cheese, butter, nonfat dry milk prices and resulting Class III and Class IV prices shown above could be a little optimistic. Very high feed prices along with these likely lower milk prices ought to encourage heavier culling of dairy herds and less grain and concentrate being fed which would dampen increases in milk per cow.”

The complete outlook is found here:
http://future.aae.wisc.edu/dairy_situation.html