February 2018 Dairy Situation & Outlook

Professor Bob Cropp’s 2018 February Dairy Situation & Outlook  full report is now available for download at UW Understanding Dairy Markets.  An exert follows below:

…Weaker dairy product prices have pushed milk prices lower. The Class III price peaked last November at $16.88 and fell to $14.00 in January and February will be near $13.50. The Class IV price peaked last August at $16.61 and has been declining since to $13.13 in January and February will be near $13.00. It looked like both the Class III and Class IV prices would stay in the $13’s at least through March. But, the good news is cheese prices have improved during February and if they hold or improve more, the Class III price could reach about $14.25 in March…

…But, as of now the dairy outlook appears a little brighter than last month. Class III dairy futures continue to improve reaching the $15’s by July, and the low $16’s by October with an average of about $15.00 for the year. I could see a similar price pattern, if not even a little higher the last half of the year, if the increase in milk production remains well below 2% and dairy exports still show growth in 2018. But, Class III will still average well below the $16.17 average last year. Class IV dairy futures show a slow increase as we move through the year staying in the $13’s for the first half of the year and only improving to the $14’s for the second half and averaging about $14.00 for the year compared to $15.16 last year. Class IV will get some support from butter prices that likely will stay above $2.00 per pound but nonfat dry milk prices which depend heavily upon exports may show only modest strength as we move through the year.

Also, for a video podcast including Dr. Bob Cropp and Dr. Mark Stephenson discussing the  Dairy Situation & Outlook, please visit Program on Dairy Markets & Policy.

For more information regarding dairy markets, please contact UW-Extension Dairy Markets Specialist Brian Gould or visit UW-Extension Understanding Dairy Markets.

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