Despite Production Increase, Milk Prices Not Expected To Drop

The nation's dairies are expected to turn out more milk next year, but that's not expected to lead to a decline in prices.  The USDA says milk demand has increased year after year, and now the agency is forecasting it another three billion pound hike in 2019.  Despite that jump, prices may not go down because demand and prices for dairy products are expected to continue strong.

"We were flat to higher on most products,” said Outlook Board Chair Seth Meyer.  “For cheese and butter, you've seen pretty good demand holding up prices, even providing pretty small marginal increases. Good demand for dry whey, offering some support there. NDM doesn't face a tariff into Mexico and domestic demand has been good...so the prices are little higher there."

2019's average all-milk price could go up 75-cents to $16.95 per hundredweight, and with expected cheaper feed prices, producers should see improved margin.  Meyer noted margins should improve so much, we may not hit the $8-level, which would trigger payments under MPP.

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