It’s always heartening to hear about stronger milk prices for our producers. Click here to read the entire story.
Higher feed prices will be partially offset by higher milk prices. The U.S. dairy herd is expected to decline modestly from 9,115 million in 2006 to 9,040 million in 2007. Recent dairy cow slaughter has been above a year earlier. Some of this slaughter likely is herd liquidation, but most of it may be replacement as cow numbers continued to rise in November and December. Production per cow will continue its incremental upward trend, topping 20 thousand pounds per cow in 2007. According to the December Dairy Products report, November production of cheese, butter, and nonfat dry milk are ahead of year-earlier levels. Low unemployment and robust job creation during the fourth quarter of 2006, combined with rising wages and smaller increases in milk production, should provide a foundation for higher dairy product prices in 2007. Cheese prices finished 2006 at $1.247 per pound, 24 cents lower than 2005. The outlook is for the cheese price to strengthen in 2007 and the season-average price is forecast at $1.310 to $1.390 per pound.
Butter supplies will be ample in light of strong dry product demand. Butter price should stage a recovery in 2007. The butter price averaged $1.219 per pound in 2006, 32 cents lower than 2005. The 2007 price is forecast to climb to $1.235 to $1.345 per pound.
The 2006 Class IV price averaged $11.06 per cwt. In 2007, the price is forecast to rise to $11.35 to $12.25 per cwt. Class III price averaged $11.89 per cwt in 2006 and is expected to climb to $12.50 to $13.30 per cwt in 2007. The resulting reported allmilk price is expected to be $13.60 to $14.40 per cwt. for 2007, after averaging $12.91 per cwt. in 2006.