News

Milk prices moving up in 2019

An ag economist says the dairy industry is headed in the right direction for milk prices to improve next year.

Mark Stephenson is the Director for the Center for Dairy Profitability at the University of Wisconsin.  “We’re moving in the right direction.  Milk production growth is slowing, stocks are getting pulled down, we’re cleaning things out a little bit, and maybe we’ll have some room, I don’t think for major price increases in 2019, but maybe by the end of it.”  He says while the USDA’s October milk production report was up slightly, a 13,000 cut in the number of milk cows in the major producing states is good news.

Stephenson says a 25-cent spread recently between blocks and barrels has been tied to decrease in processed cheese demand from millennials and an increase in overall cheese consumption.  “Back in 1970, we were just a little over 11 pounds per capita.  Today, we’re about 37 pounds per capita, that’s a half a pound of cheese per person, per year that we’ve increased consumption—that’s huge!”

He projects Class III milk prices for the end of this year in the high $15 range and $1.25 improvement next year.