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Dairy prices could be in for a bumpy ride

A dairy analyst says the dairy industry could be in for a bumpy ride this year.  During last week’s Ag Outlook Forum, the USDA projected milk prices would increase 11 percent.

University of Missouri’s Scott Brown says the year is starting off with a lot of optimism.  “I believe that the slowdown in production expansion in Oceana – New Zealand and Australia – and even the EU who has slowed down substantially in terms of milk production, will create opportunity for us to export dairy products in 2017,” he says.

But, he tells Brownfield the latest milk production report showed a year-over-year increase of nearly 3 percent.  “We’re going to have to think about how that all balances,” he says.  “Perhaps some of the very bullish forecasts that are out there might get trimmed a little as we move ahead.”

Brown says it is still early in the year and the projections for milk prices could still change a lot.  “We’re so inelastic on the demand side it doesn’t take much to move us from low prices to high prices,” he says.

Brown made his remarks during Brownfield’s latest Weekly Livestock Market Update

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