With milk prices averaging $20.49 last year in Florida, producers enjoyed estimated profits of $3/cwt, says Albert De Vries, an economist with the University of Florida. Profits in 2006 averaged 73¢/cwt.
Profits in 2007 would have been even higher, but feed costs soared 160% to 200% last year compared to 2006. Feed prices were driven mainly by higher corn prices.
The better margins didn't translate into more milk. Production in 2007 in the Sunshine State declined 7%. Dairy farm numbers fell to 142, a 5% decline. Cow numbers also fell 6,000 head, a 4.6% drop.
Wholesale milk prices in 2008are expected to average $21.45/cwt. But continued high feed prices mean profits will likely decline, due to rising feed and fuel costs. "It'll be a challenging year again for producers,” says De Vries.