"There is more downside risk on 2015 milk prices compared to 2015 feed prices," Peter Vitaliano, economist for the National Milk Producers Federation (NMPF), told those attending the joint annual meeting of the NMPF and Dairy Management, Inc., in Dallas, Texas.
Then Vitaliano went on to show perhaps the most compelling chart of the entire meeting - It showed what would become 11 straight months of $23-plus All-Milk prices dating back to January 2014 through this November. That, of course, is a record. Then he showed the final month of 2014 trailing off to $21.30.
While that was the good news, the line for 2015 was a far different story. The January prediction started out at $19.90, then trailed down to $17.90 by mid-summer and crawled back to $19 by November.
Think it can't happen?
Vitaliano actually believes his predictions might be too high, which brings us back to the opening statement, "There is more downside risk on 2015 milk prices compared to 2015 feed prices."
Aside from growing milk production in the leading two export regions, New Zealand and the 28 nations of Europe, there are production and sales trends at home that indicate next year's prices will be far below 2014 levels.
To make his point, Vitaliano compared and contrasted January to June 2014 to July and August 2014:
What does 2015 hold?
The trend appears clear, with more dairy products becoming available worldwide, that we are moving from a sellers' market to a buyers' market.
