(NMPF) — The recent upsurge in dairy prices is forcefully showing up in data, with many of the most recently announced and reported key milk and dairy prices achieving their highest prices in nearly five years. The September U.S. average all-milk price was the highest since December 2014, as was the October AMS survey price of non-fat dry milk and the advance-announced federal order Class I mover for December. The October AMS survey price of cheddar cheese and the federal order Class III price were both the highest announced since November 2014.
Continued reduction in the number of U.S. milking cows — a trend that will likely taper off in a few months — and moderate increases in the average production of milk and milk solids per cow have been important supply-side contributors to higher prices. Good domestic demand growth and improved cheese exports has also been a positive factor, as has the final liquidation of the massive government-acquired stocks of skim milk powder the European Union built up in 2015 and 2016. These developments more than offset a drop in exports, some recent softening of U.S. butter prices and deteriorating dry whey prices, owing to China’s swine fever epidemic and the ongoing U.S. trade war with that country.