University of Wisconsin’s Bob Cropp says the last week of USDA reports confirms that farmers are keeping herd sizes low to improve prices.
“With production like this, I think $18 milk is surely there” state Cropp.
Other countries are also experiencing low milk production because of drought which is good for world prices.
“With U.S. milk production growth under one percent, you have to look at stronger prices worldwide.”
He says less production is also leading to reduced dairy products in cold storage compared to a year ago.
“The cheese markets in just the last week or so has had quite a rebound-both for barrels and blocks.”
Butter and powder prices have also been improving which Cropp says is spilling over into the futures market. Class III prices were less than $14 per hundredweight in January.