In just five years, Michigan went from the middle of the pack down to rock bottom when looking at regional and state mailbox price data.

Calculated by USDA’s Agricultural Marketing Service (AMS), mailbox prices represent the new pay price received by dairy farmers for milk, hence dubbed mailbox prices in reference to receiving paychecks in the mailbox.

For 2016, Michigan pay prices averaged $14.31. That was even lower than New Mexico’s $14.43 and California’s $14.68. Those two states traditionally ranked at the bottom of the 20 states or regions tabulated by USDA. Nationally mailbox prices averaged $15.95 last year . . . placing Michigan $1.64 below the average.

Perhaps more concerning if you are a Michigan dairy producer is the fact neighboring states have received much higher pay prices. Surrounded by the Great Lakes, it’s difficult for Michigan milk to move beyond its western, eastern, and northern borders. With that in mind, nearby Wisconsin ranked third at $16.59; Minnesota fifth at $16.45; Illinois sixth at $16.34; and Ohio eleventh at $16.05.

Michigan has grown its milk production tremendously and moved into fifth place among all states in 2016. However, finding room for that new milk remains a challenge. That’s the main reason Michigan saw its mailbox prices fall in the past six years:

• 2011, Michigan ranked No. 11 of 20

• 2012, Michigan ranked No. 16 of 20

• 2013, Michigan ranked No. 15 of 20

• 2014, Michigan ranked No. 16 of 20

• 2015, Michigan ranked No. 18 of 20

• 2016, Michigan ranked No. 20 of 20

Click on the link to download a spreadsheet of 2016 mailbox prices.

To read more about mailbox prices, turn to page 240 of the April 10 edition of Hoard’s Dairyman.

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(c) Hoard's Dairyman Intel 2017
April 3, 2017
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