Dairy Prices Should Rise Despite Increased Production

Dairy production in 2017 will increase about 2.5 percent in the U.S., but that won’t negatively impact prices according to the USDA.

Analyst Jerry Cessna said producers should still see improved returns with the average price around $18 per hundredweight.

“And that compares with $16.24 in 2016, so that’s quite a bit higher.”

More production doesn’t usually equally more production, but Cessna said there are several factors.

“We have got tight global markets right now. The EU and New Zeleand and some other places have lower milk production than they did the previous year. We’re also expecting demand to be strong in the next year. We’ve got a growing economy. It’s been growing over the last years, and we think it will continue to grow.”

Another benefit for producers will be lower feed and other input costs.