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Milk price projections will climb into '20

By: Jake Putnam
Published in Video on  August 02, 2019

Boise--With Market Facilitation Program payments are out soon, farmers will get an additional bump with a USDA report that says milk prices continue to rise.

"Milk supply has been tight," said Producer Mike Garner of Raft River. "Dairymen are getting better and more efficient, we just can't stay below productions costs, and this report shows that,"

The Milk Facilitation Program will pay dairy producers .20 cents per CWT.  Its because nationwide, milk production is down 0.3% in June. Cow numbers are down 10,000 head from May, 29,000 from January, and 91,000 from a year ago. Also, butter stocks are down 2.6%. American cheese stocks are also down 2.6% with total cheese down a half percent. 

But USDA projections reveal a rollercoaster ride later this spring as prices could dip to $16 in the first quarter of 2020, but then rebound above $17, even up to $18  for the rest of the year. But forage quality and feed prices will continue to rise, cutting into profit margins. But some Idaho dairymen have anticipated feedstock prices.

"We produce our own hay, so we can control our input costs to an extent," said Garner. "We can control things on the feed side, so we're sitting good, other producers around here will do just fine too because they grow a lot of their feed."

The USDA urges dairy farmers are urged to sign up for Dairy Margin Coverage if they have not yet done so. The DMC payments for the first five months of 2019, along with the premium discount, are almost enough to provide $9.50 coverage for Tier 1 production for all five years of the program.

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