USDA reported this morning that the All-Milk price is expected to average in the range of $16.20 to $17 in 2010, a vast improvement from $12.79 in 2009.
In its Livestock, Dairy and Poultry Outlook released this morning, USDA also expects dairy exports to rebound, though not quite to the level of 2008's record volume. Domestic consumption of dairy products should also climb 1%.
Corn and soybean prices are also expected to mitigate, with corn ranging from $3.40/bu. to $3.85/bu. and soybean meal from $265/ton to $315/ton. Combined with stronger milk prices, the milk-feed price ratio is expected to average 2.5, which typically means a stable cow population.
However, USDA expects dairy cow numbers to dip slightly below 9 million head in 2010 as farms continue to exit in the aftermath of the 2009 train wreck.
Jim Dickrell is editor for Dairy Today. You can reach him at firstname.lastname@example.org.