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Farmers are expected to be cautious with improving dairy prices

Dairy economists are gathering in Michigan to get a pulse on the shifting dynamics in the industry. 

Mark Stephenson with the University of Wisconsin tells Brownfield attrition in the industry has trimmed the surplus of milk in recent months and he expects relief to dairy prices before the end of the year.

“This is a difficult and brutal way to do that, but as those come into better alignment, we can find that milk supplies actually feel tight and in some of these areas of the Upper Midwest they are.”  

After several years of tight margins, he believes farmers will take advantage and keep production near current levels.

“They’re being cautious about whether or not there’s going to be the same kinds of returns available to them in the future so I’m not convinced that we’re going to see the same kind of grabbed at increased milk production even though we may have a price that would have simulated it in the past.”

Between 2015 and 2017, Stephenson says milk production growth in Wisconsin, Idaho, Michigan and New York grew by more than 15 million pounds per day or the equivalent of three additional big processing plants.

Brownfield interviewed Stephenson during the 25^th National Workshop for Dairy Economists and Policy Analysts in Grand Rapids, Michigan.