Milk prices for the rest of the year will of courses continue to depend upon domestic sales, dairy exports and the level of milk production. With continued improvement in the economy domestic sales should be positive for milk prices. Dairy exports will continue to face stiff competition for markets mainly from the EU as their milk production continues to show strong growth. As far as other major exporters milk production is up just slightly in Australia but lower in New Zealand and Argentina. On the positive side U.S. dairy products remain very price competitive on the world market. U.S. prices of butter, cheese, nonfat dry milk/skim milk powder and dry whey are all lower than EU or Oceania prices. The world economy also is improving. So U.S. should see some growth in dairy exports during 2018….
Unless milk production slows down and/or dairy exports show greater increases it appears that milk prices will continue to slowly improve.
Class III could improve to the $15’s by July and possible top out near $16 by October and average for the year no higher than $15.00 compared to $16.17 last year. The Class IV price could improve to the $14’s by July but remain below $15.00 and average no higher than $14.00 compared to $15.16 last year. But, hopefully, lower milk production and higher exports will push milk prices higher.
Also, for a video podcast including Dr. Bob Cropp and Dr. Mark Stephenson discussing the Dairy Situation & Outlook, please visit Program on Dairy Markets & Policy.