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Milk Prices Will Falter But Not Margins

by Mike Austin

With cheese price over $2.25 per pound and several Class 3 contracts above $20.00 per hundredweight, many producers are wondering how strong a price year this may be. Well according to the University of Wisconsin College of Agriculture and Life Sciences 2014 Ag Outlook Report prices are going to falter. Cheaper feed prices will lead to increased production and even though demand continues to build...the extra supply will pressure prices.... and on average Wisconsin milk prices will be down $0.75 to $1.00 from 2103. However...those lower feed costs will be beneficial and as a result dairy margins should actually be better than 2013. 

Below is a projection from U.W. Extension Specialists Brian Gould on his projections for Class 3 and Mailbox prices for 2014

Month        Class 3      Mailbox

January      $20.72        $22.72

February    $21.01       $23.08

March        $19.79       $21.99

April           $19.07        $20.72

May            $18.70        $20.27

June          $18.50        $19.97

July           $18.23        $19.54

August      $18.10        $19.39

Sept.         $18.02        $19.30

Oct.           $17.92        $20.05

Nov.         $17.85        $19.98

Dec.         $17.74        $19.81