Dairy prices are on the way up.

"It's been very interesting in dairy as we continue to raise our expectations for product prices and therefore for milk prices by class and the all milk price," noted USDA Chief Economist Seth Meyer. Despite the increase he acknowledged dairy farmers still face challenges.

"Those input prices are rising forward and substantially as well too.  So I think while you're seeing milk prices rise it's followed with feed prices that really aren't adding the profitability."

Meanwhile World Outlook Board Chair, Mark Jekanowski, points to programs like USDA's Dairy Margin Coverage.

"Whenever the margin is calculated to be less that $9.50 per hundred weight that triggers a payment for those producers that are signed up."

So with higher prices and higher feed costs Jekanowski expects the calculated margins to remain mostly below $9.50 throughout the course of the year.

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