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Economist says dairy prices are falling with additional production

The lead dairy economist for RaboResearch expects milk prices paid to dairy farmers will continue to fall for now.

Lucas Fuess tells Brownfield the prices paid for Class III and IV milk dipped lower and lower, into the 18-dollar range. “You know, those prices are not necessarily exciting for dairy farmers here when they’re dealing with costs that have climbed over the past two years and will still be pretty high this year.”

Fuess says as the U.S. has returned to supply growth in the past several months, the attention will be on the demand side. “Whether it’s Chinese demand, Asian demand as a whole, or whether its consumers here in the U.S. switching purchasing decisions because of inflation. We’re kind of waiting for those additional signals before we get a better outlook on milk prices this year.”

Fuess says consumers might trade down to more economical grocery and restaurant choices because of inflation.