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Butter keeping dairy farmers afloat

An ag economist says increased milkfat consumption is helping to keep dairy farmers in business.

Peter Vitaliano with National Milk Producers Federation tells Brownfield butter has been a huge driver for farmers’ milk prices.  “By my calculations, last December and November butter alone determined about a little over two-thirds of farmers’ total milk checks.”

He says the price of butter is forecast to stay above 50 percent of farmers’ milk price throughout the year.  “With milk powder prices and dry whey prices down, butter prices up relatively speaking, and cheese prices being so-so—farmers’ checks are being much more heavily influenced by butter prices right now than they have been historically.”

Vitaliano says if the butter price weakens with increased milk production, it could have a substantial impact on the market.  “Non-fat dry milk prices and dry whey prices are about as low as they’re going to get because they’re driven by the world market and may very, very slowly come up—butter is the big wild card.”

He says farmers need to be prepared for milk prices to remain depressed through at least the summer months.

AUDIO: Interview with Peter Vitaliano