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Milk production forecast lower while components remain strong

Dairy economists expect forage quality issues and rising grain prices to impact milk production in the Upper Midwest and Northeast.

“Corn is now $4.50 a bushel, way up, and soybeans so we’re looking at higher feed costs and farmers have culled more cows, less heifers—you’re not looking at any big expansion in milk production this coming year.”      

University of Wisconsin’s Bob Cropp says USDA is calling for a slight increase in production this year and less than two percent growth in 2020.

Mark Stephenson says milk production is below year ago levels, but components like butterfat and protein are up.

“If you look at yield in a cheese vat for example, that milk production on basis of components is not actually down.”     

He says that’s probably one of the reasons milk prices aren’t stronger.

Cropp says if milk production stays low, the need for exports isn’t as great because domestic demand can absorb more of the supply and support prices.

They’re forecasting milk prices for 2018 to average between $16.50 and $16.70 after starting the year below $14.