Milk prices haven’t exactly jumped higher early on in 2019. A Drovers’ report says dairy farmers are in need of a market rally after years of low prices. However, at least some relief may be coming this year.
Bryan Doherty, VP of Stewart-Peterson, tells Drovers that dairy is a tough market to be in right now because there’s too much product out there yet. The rate of efficiency per cow is still improving, which makes the market difficult to get going in the right direction because there’s just too much milk. Doherty says prices are low enough where demand is starting to grow again. Global dairy prices have begun to rise once again. Doherty also predicts more culling in the U.S. dairy herd while demand for dairy products should continue to increase. Recent cow numbers in the national dairy herd have been dropping. He points to that as a sign of a possible rally in milk prices in the coming months.
Trade will also play a role in which direction the price of milk goes. Ongoing negotiations with China could possibly bring a boost to the demand side of the milk pricing equation.
Source: National Association of Farm Broadcasters