Milk prices continue to improve

Milk prices continue their upward trend of improvement, points out Bob Cropp, Professor Emeritus of Agricultural and Applied Economics, in his November 2009 Dairy Situation and Outlook Report. The Class III price — for milk used to make cheese — improved to 12.82 for October and will be around $14.05 for November (it was was $9.97 for both June and July). Prices will continue to improve for December and through 2010, Cropp predicts, and this is improving farmers’ returns over feed costs, a key measure of profitability (or lack thereof).

However, in order for farm-level milk prices to continue to improve, cow numbers and milk production will have to continue to fall. Cow numbers and production are falling in western states, but in Wisconsin, both have shown increases.