Price Forecast Provides Glimmer Of Good News For Dairy Farmers

Aug 5, 2019

A new economic forecast has some good news for struggling dairy farmers: wholesale milk prices are expected to increase next year.

The forecast from the Agri-Mark, the region's largest dairy marketing cooperative, indicates prices should recover a bit after five years of decline.

Catherine de Ronde, senior economist at Agri-Mark, said she expects the average price per hundredweight of milk to increase slightly next year, from around $18 to $19.

She said that increase should happen because milk production is flat.

“And that’s a pretty good spot to be in in terms of trying to put some positive push on milk prices,” de Ronde said.

But she noted that also means more farms have gone out of business.

“You know, unfortunately, sometimes where that milk production decline is coming from is the loss of farms, of course,” she said.

"Unfortunately, sometimes where that milk production decline is coming from is the loss of farms, of course." — Catherine de Ronde, Agri-Mark economist

Vermont lost about 25 farms from January through July of this year, according to the Agency of Agriculture.

Poor feed quality because of bad growing conditions in the Midwest, de Ronde said, could also lead to lower milk production, although the downside there is that feed could get more expensive.

On the price side, international sales of U.S. milk products could increase demand and boost prices. But de Ronde said trade tensions with China complicate the forecast.