Declining Milk Production Leads to Higher Prices

USDA has again lowered its 2021 and 2022 milk production estimates because of expectations for lower cow numbers and milk per cow.

In its September supply and demand report, USDA raised estimates for butter, cheese, and nonfat dry milk for 2021 and 2022 because of improving demand and lower production.  The whey price was unchanged.

This year, and into next, the USDA is forecasting Class III and Class IV prices to rise because of higher dairy product prices.  The 2021 all milk price forecast was raised 20 cents to $18.15 per hundredweight, while 2022’s price increased 55 cents to $18.40.

EDITOR’S TAKE:

We at CAD are pleased that dairy supply and demand are coming into a better balance, which results in improved prices and incomes for dairy operations. The dairy industry has struggled to find that sweet spot in the marketplace that would stabilize or increase prices for fluid milk and other dairy products. It now appears they are on the right track. Let’s hope that the remainder of 2021 and 2022 sets the stage for tremendous success for dairy farmers everywhere. We wish them all the best going forward!