Cross your fingers; continued profitability may be in the cards for dairy producers in 2014.
At an outlook conference in Twin Falls, Idaho, last week, Daily Dairy Report editor Mary Ledman (seen here) said a rebound in milk production by major exporting nations has already begun and is likely to continue next year. This is clearly reflected by U.S. Class III futures prices for next spring that are $1.50 below current levels.
That's bad, but more milk globally doesn't figure to cause a producer price disaster like it has in the past. "The tide is changing," said Ledman. "Producer milk prices are higher now than ever before, especially in Europe and Oceania."
While lower U.S. milk prices are coming, cheaper feed is already here. Abundant supplies – especially corn – could push feed prices even lower and extend the profitability run that producers have been on this year.
Income over feed costs improved during both the second and third quarters of 2013 in all of the four largest dairy states (California, Wisconsin, Idaho and New York). Overall margins were highest in New York ($9.95) and lowest in California ($7.53).
Editor's note: In our Hoard's Dairyman Intel newsletter we incorrectly identified Mary Ledman as Nancy. We have corrected it above.
