As printed in our February 10, 2017 issue . . .

POSITIVE PRICE PROSPECTS continued as USDA economists moved the All-Milk price forecast up 75 cents in January to an $18 midpoint for 2017. With a new range of $17.60 to $18.40 per hundredweight, expectations for this year’s milk have shot up $2.75 since May’s opening prediction.

THESE PRICES HAVE MORE UPWARD POTENTIAL. “We could even have more improvement in these projected prices if world production doesn’t climb too much in the final quarter of 2017,” suggested the University of Wisconsin’s Mark Stephenson. “Overall, in this current price cycle, I would expect several more months of recovery, at the very least.”

CME FUTURES, OPTIONS, AND OTC or “over-the-counter” swaps are giving producers the opportunity to hedge profits — many in the top 10 percent of historical margins — and well above the five-year average, reported Robert Chesler and Daniel Zelazik with INFL-FCStone.

THE U.S. HAS BEEN THE ONLY TOP-FIVE dairy exporter that has been expanding milk production. December milk output rose 2.2 percent when compared to the previous year. That change mainly was driven by gains of 1.7 percent more milk per cow when compared to the same time last year.

CALIFORNIA EXPANDED MILK FLOW by 0.5 percent while Wisconsin grew 1.7 percent. Texas led all gainers, up 11.7 percent. Among the top 23 dairy states, only five produced less milk when compared to the previous year: Illinois, Oregon, Utah, Virginia, and Washington.

A COW’S ABILITY TO PRODUCE MILK improved on a very linear trend of about 284 pounds of additional milk per cow per year. “This trend has been fairly consistent dating back to 1960,” remarked Stephenson, while speaking at the Wisconsin Agricultural Outlook Forum.

THE U.S. JUST TOPPED 35 POUNDS OF CHEESE USE on a per capita basis. “That is an elite number among all nations of the world,” said Stephenson. “However, the U.S. still has room to grow as people in Germany and France eat over 50 pounds each year.”

U.S. FARMERS COULD PLANT 3.5 MILLION fewer acres of corn as growers seek out lower cost crops, said Todd Hubbs, University of Illinois.

EVEN THOUGH THE WORLD IS AWASH in soybeans, U.S. farmers could plant an additional 4 million acres, bringing projections for the 2017 crop year to 87.4 million acres, Hubbs forecasted in mid-January.

BRIEFLY: California’s drought could be over as the snowpack in the Sierra Nevada Mountain range is 161 percent of normal and 43 percent of the state was out of drought conditions. President Trump pulled the U.S. out of the 12-country Trans-Pacific Partnership during his first week of office. The U.S. Dairy Export Council selected former USDA Secretary Tom Vilsack as its new CEO and President.

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