Milk protein prices drop to 16-year low

George W. Bush was just elected as the 43rd U.S. President the last time milk protein prices were this low. At $1.2248 per pound, protein fell to the lowest levels, as calculated by the Federal Milk Marketing Order system, since December 2000. That’s when values stood at $1.0378 per pound. Back in that era, prices hovered at those levels for only a short time, as chronicled by the website Understanding Dairy Markets.

Milkfat is back, however. That is welcomed news to struggling dairy farmers.

At $2.9456 per pound, butter is now driving milk checks. With the August 2 federal order announcement, milkfat prices came close to previous highs posted in November 2015 ($3.1830 per pound) and September 2014 ($3.2467 per pound). A more in-depth review of butterfat prices also can be found at Understanding Dairy Markets.

The fact that milkfat is contributing more to the All-Milk price appears to be a paradigm shift as consumers are demanding higher fat products. Moving forward, milkfat could contribute north of 50 percent to milk checks compared to under 38 percent for many of the previous decades.

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August 14, 2017