Look back over more than 100 years of numbers and you won’t find a dollar value starting with 24 — except for February 2014.
Wisconsin farmers are expected to see an average milk price of $24.90 per hundredweight in February, that’s the highest price ever recorded in the state.
The February price is 90 cents higher than January, and about 20 cents more than the national average, according to a monthly report from the Wisconsin field office of the National Agricultural Statistics Service.
“It’s a good opportunity for (farmers) to make some changes and upgrades and it’s good for the industry because it’s giving people an opportunity to stay in it,” said Aerica Bjurstrom, ag agent with Kewaunee County University of Wisconsin-Extension. “Whereas 2009, that just wiped out a whole bunch of people.”
Some farmers are still feeling the effect of low prices through much of 2009 when the annual average was $13.10 per hundredweight, below the breakeven point for many farmers at that time.
“Some of the people I work with are still trying to pay off 2009,” Bjurstrom said. “This is a good time for them start catching, and maybe get a ahead a little bit. Last year was a good year, too.”
Farmers also faced high feed costs through 2012 and 2013 due to drought.
Shawano County farmer Scott Matsche says the spike in prices is helping that operation make up some of the erosion it saw five years ago.
“It’s been way overdue,” he said Tuesday. “We’re still behind on 2009. That was a bad hit. This is helping us get caught up … and with the high corn cost the last two years, that ate the profits right up.”
Matsche milks 2,000 cows near Birnamwood.
He’s seen prices ride a roller coaster over the last 15 years and says high prices will increase industry production and likely push prices back down. He’d like to see the price hang around $20 per hundredweight.
“Everything in moderation is better,” Matsche said. “It was a short month, and it was only one month.”
A final price for February will be issued at the end of the month along with projected prices for March. The breakeven point ranges from farm to farm, but agricultural experts say it’s generally in the high teens per hundredweight.
January’s price of $23.80 per hundredweight is the second-highest price. Third highest was $23.20 per hundredweight set in November 2012, according to historical records dating back to 1910.
“It’s projected to go back down toward the end of the year,” Bjurstrom said. “It can’t stay that high forever.”
Flat milk production and strong exports have helped support the higher prices. Exports have seen some decline and production is likely to increase through the year, according to a monthly analysis from Bob Cropp, a dairy market expect with the University of Wisconsin.
“No doubt with favorable weather and good crops this summer milk production will continue to improve,” he wrote. “Milk prices will average higher for the first half of the year than for the last half. But, as of now it appears that milk prices will average higher for the year than 2013 setting a new record high.”
Feed prices — namely corn — have moderated in recent months.
“Even if (milk) prices do end up at (a) lower level, with lower feed costs 2014 is shaping up to be good year for dairy producers — and they deserve it,” Cropp wrote.
Improved prices through 2013 and strong prices through the start of this year have some farmers looking at making capital improvements on their operations, she said.
“We’ve had a lot of people interested in robotic technology,” Bjurstrom said. “We’re not seeing a lot of major expansions like we were before … but last year we started seeing a lot of smaller-scale modernization projects where people replacing stalls in the barn, upgrading their feeding equipment, projects like that.”
Farmers continue to face increased costs for fuel and fertilizer, and uncertainty over what the spring will hold as a long, cold, winter drags on.
“There’s a lot of optimism out there with the prices, it’s the winter that’s concerning a lot of people,” Bjurstrom said. “This weather is really weighing on their minds.”
Source Green Bay Press Gazette