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Higher milk prices coming

The World Agricultural Supply and Demand Estimates from USDA on Thursday trimmed the U.S. milk production estimate a little for 2012 but raised it a bit for 2013. The ag department now projects 2012 milk production to total 199.6 billion pounds and 2013 to total 199.7 billion.

The 2012 cheese price was raised 6.5 to 7.5 cents now pegged at between $1.725 and $1.735, butter was raised 4 to 5 cents now at $1.615 to $1.645, nonfat dry milk up 4 cents at $1.31 to $1.33 per pound and dry whey 1 to 2 cents higher 58.5 to 59.5 cents. As a result, the Class III price estimate was raised 70 to 80 cents projected to be between $17.55 and $17.65 this year. Class IV is 55 cents higher, $16 to $16.20 and the all milk price estimate up 60 to 80 cents from last month at $18.50 to $18.60 per hundredweight.

The 2013 milk price estimates were raised around $1.00 from last month, Class III is now projected to be between $17.75 and $18.65 next year, Class IV is $16.75 to $17.75 and the all milk price should average $19.00 to $19.90 in 2013.

The higher milk prices are expected to slow the decline in cow numbers and push production per cow higher.

Read the WASDE report here:

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