The United States Department of Agriculture increased its projected all-milk price by 20¢ to 30¢/cwt for 2014 in its June livestock, dairy and poultry outlook report released this morning.
USDA now says the all-milk price will average $22.90 to $23.30/cwt in 2014. Due to expected increased production and stronger foreign competition, the agency expects 2015 prices to soften to $19.75 to $20.75.
"The milk-feed price ratio is likely to remain at a level that would support expansion in the dairy herd in 2015," say USDA economists.
USDA expects cow numbers to climb 34,000 head this year to 9.255 million. Next year, it sees an additional 85,000 head coming on-line, with total cow numbers rising to 9.340 million.
Even with these high prices, UDA expects exports to remain strong. It is projecting sales of 39.4 billion lb. on a skim-solids basis this year. Those sales will likely decline 2% next year, to 38.6 billion lb. due to tougher foreign competition.
You can read the full report here.