“Wisconsin’s All-Milk price should be up $2.45 for the year,” said the University of Wisconsin’s Mark Stephenson in speaking to those attending the Wisconsin Agricultural Outlook Forum held on the University of Wisconsin-Madison campus on Thursday, January 19.
Of course, Class III and Class IV prices are big drivers of the All-Milk price in Wisconsin, as Class III milk goes into cheese while Class IV is destined for butter and powder products.
“I have Class III up $2.50 and Class IV up $3.40 for the year in the United States,” Stephenson went on to explain.
What factors could affect these forecasts?
“We could even have more improvement in these projected milk prices if world production doesn’t climb too much in the final quarter of 2017,” Stephenson said. “Overall, in this current price cycle I would expect several more months of recovery, at the very least,” said the ag economist.
During the past year, U.S. dairy farmers have been spared lower prices experienced in other countries due to the strong domestic market in the United States. Prevailing world prices last year included: the U.S. — $17 to $18; the European Union — $13; and New Zealand — $10. (All of these prices have been converted to a per hundredweight or cwt. basis.)
“New Zealand allowed prices to fall to clear markets,” Stephenson went on to say.
When it comes to export markets, “The U.S. has been competitive on nonfat dry milk and whey, but not so for cheese and butter,” explained Stephenson when looking at past market conditions. “U.S. butter exports might have some opportunities moving forward as the U.S. and world prices begin to converge,” noted Stephenson.
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(c) Hoard's Dairyman Intel 2017
February 6, 2017