USDA: Dairy prices going in right direction
News Date November 17, 2009
According to USDA’s Nov. 17 Livestock, Dairy, and Poultry Outlook report, the overall forecast for the dairy industry may be even better than previously thought. The all milk price is projected to reach $16.05 to $16.95/cwt in 2010, nearly a $4.00 increase above the average prices in 2009, which are estimate to average $12.60 to $12.70/cwt.
There are several improving factors for the industry providing for the optimistic forecast:
- Production Levels: Production in 2009 is expected to decline from 2008, marking the first decline since 2001. The reduction can be credited to a sharp decrease in dairy cow numbers, which is expected to average about 2 percent smaller in 2010 than in 2009, on top of the 3 percent reduction in 2009 from 2008 levels.
- Feed Prices: Corn, soybean meal, and alfalfa prices are all expected to further decrease in 2010.
- Exports: Increased global demand, coupled with lower milk production in Oceania, lead economists to forecast an improved export market for dairy products.