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2021 dairy pricing comes with caution

An ag economist says government purchases have helped buoy dairy prices during the pandemic this year, but those buys are nearly finished.

“Those prices have come down a lot.  I think the expectation is maybe less lift on the cheese side from those food box purchases than what we’ve seen.”

Scott Brown with the University of Missouri tells Brownfield he’s closely watching if there’s another federal stimulus bill and how fast the general economy can recover from COVID-19.

“If we have no more stimulus coming, I do worry about the demand side of the picture.”  

He says relying on the Dairy Margin Coverage Program and other risk management programs will be helpful in the year ahead where feed costs could become more of an issue.

“We now see a corn price that’s going to average $4 a bushel they say for the current year that we’re in—we want to be paying attention to what that means to the bottom lines of dairies.”

Brown says while USDA raised the all milk price for 2021 in the latest supply and demand report, it’s still 50 cents lower than this year.

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