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Dairy situation and outlook: Favorable returns for producers may be a year away

The financial stress dairy producers are currently facing will continue to push down milk production for most of 2010 and result in further improvement in milk prices, says emeritus professor Bob Cropp in his June 18 Dairy Situation and Outlook report. But, it could take until the second half of 2010 before prices get to a level for favorable returns to dairy producers. If production slows more than expected, domestic demand and/or exports improve more than expected, or some government action to improve prices is implemented, prices could improve much sooner and that would be very well received.

Cropp’s outlook reports and other dairy market information are available online on the Understanding Dairy Markets website, maintained by Brian Gould, associate professor of agricultural and applied economics.

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