In the perplexing world of finding a price to pay dairy farmers for milk are the trends and nuances that influence the result. Consider: the amount of milk produced each month; the amount of milk purchased for use in cheese, butter, whey, and fluid products; dairy exports; weather; feed costs; and the total number of cows around to make the milk.
As it stands, prices paid to dairy farmers are softening, according to the Dairy Situation and Outlook authored by Bob Cropp, UW-Madison emeritus professor of ag and applied economics. National milk production has decreased while dairy producers in Wisconsin have recently boosted milk production by a sizable 4.7 percent.
Much of the decline in national milk production is taking place in the western states, Cropp reports. California, the nation’s biggest milk shed, production has declined by 5.9 percent recently. Escalating feed costs, among other things, have forced dairy farmers to unload cows.
Included in the plight of the California dairy business are lower prices paid to farmers for milk, especially when compared to Wisconsin. Milk checks delivered to producer mailboxes show the difference between Wisconsin and California:
For more information: Understanding Dairy Markets website