Little Price Movement Anticipated in the Milk Market

February 29, 2016 11:45 AM
Little Price Movement Anticipated in the Milk Market

Despite the global glut of milk prices, milk production continues to soar. Oversupply and outside market factors have analysts thinking there’s not much downside left in the milk price, but the upside is limited too.

According to Robin Schmahl of AgDairy, the market anticipated lower production numbers coming into USDA's Feb. 19 Milk Production report because of the low milk price. However, that wasn’t the case. USDA increased its production estimate by 100 million pounds.

“Milk production this year is still expected to reach 211.9 billion pounds, up 3.4 billion pounds from the 2015 setting another record for milk production,” Schmahl says, with a caveat: “Keep in mind it’s just an estimate.”

The increased production doesn't appear to be slowing down, according to dairy markets analyst Bryan Doherty of Stewart Peterson. “It’s like any other market this year. We’ve got an oversupply situation,” he says. “As I visit the large producers, I don’t think they’ve cut back this year.”

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Unfortunately for dairy farmers, Doherty predicts the market will likely continue trending downward. “This market hasn’t felt enough pain,” he says. “We probably don’t have a lot of downside, but the upside is limited.”

How are you coping with low milk prices? Let us know in the comments. 


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Spell Check

Peshtigo, WI
3/2/2016 05:31 PM

  We are having a very difficult time coping with the low milk prices. We've never had it where we couldn't pay our bills every month. The cost of feed, etc. has not gone down. We are just a family run dairy and milk an average of 160 cows. All the large dairies are hurting the family run farms.

Wooster, OH
2/29/2016 05:26 PM

  Jan 2016 US butterfat production was the highest in history for any month ever.


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