2020 Milk Prices Predicted to Rise

2020 Milk Prices Predicted to Rise

Farmers could see a boost in long-depressed milk prices next year, after gaining a dollar or more per hundredweight this year.

USDA’s average projected all-milk price for 2020 is $19.40 per hundredweight, an 80-cent increase over this year, said Zach Myers, risk education manager at the Center for Dairy Excellence.

He spoke Dec. 18 during the monthly Protecting Your Profits call.

“Class III price peaks at about $19.50 per hundredweight this month and declines to the lower 17’s by next spring before rising into the upper 17’s by fall of 2020,” Myers said.

Class IV milk used for butter and dry products &tstr; is expected to rise from $17.50 per hundredweight into the mid-$18 range.

Class IV prices is expected to top Class III in late winter or early spring and remain there for the rest of 2020.

October’s year-over-year commercial disappearance, a measure of demand, increased 18% for milk powder, 6% for American cheese and 4% for butter.

Dairy exports could set a record this year. Trade friction with China, Canada and Mexico has been offset by rising milk prices and increasing sales to Southeast Asia, South Korea and South America, Myers said.

The U.S. is exporting about 15% of its milk supply and importing about 4%.

The sign-up period for Dairy Margin Coverage was extended to Dec. 20.

At the time of the call, only 19% of dairies nationwide had enrolled, and only 8% in Pennsylvania, Myers said.

That’s a steep drop-off from the 61% nationally and 36% in Pennsylvania who signed up for 2019 coverage just a few months ago.

While enrollment would normally be held before the year begins, the sign-up period for 2019 ended in September because the Farm Bill, which authorizes the program, was passed very late last year.

About 200 Dairy Revenue Protection insurance policies have been sold in Pennsylvania. More than 3,400 have been sold nationwide.

In 2020, the Protecting Your Profits call will shift to a webinar and podcast, though the program will still be provided by phone for listeners without internet access.

Some months may feature an extended program with guest speakers on dairy pricing and risk management.

The next call, at noon on Jan. 22, will feature Katie Burgess, a commodity risk analyst at Blimling and Associates.


Source: Lancaster Farming

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