Dairy Market Snapshot

Dairy Market Snapshot

The region’s dairy producers are weathering weaker milk prices with strong balance sheets bolstered by exceptional profits in 2014. Northwest Farm Credit Services Knowledge Center’s Matthew Kloes gives an update on the dairy industry
Kloes: “While profitability is unlikely to improve based on near-term milk price increases, expected declines in feed costs should push break-even levels lower throughout the year. Additionally the USDA does forecast milk price improvement towards the end of the year based on increases in Chinese milk product imports and slower growth in domestic milk growth.”
Year over year February milk production reported in the USDA’s March 19, 2015 Milk Production report rose 1.7 percent in the 23 major milk producing states. Milk production in Idaho, Oregon and Washington increased 1.5, 0.5 and 2.4 percent respectively. Other Western State production gains included increases of 2.9 percent in Arizona, 7.6 percent in Colorado and 6.9 percent in Utah.
Kloes: “Although the pace of growth has slowed, U.S. milk production and product ending stocks continue to rise. Additionally, strong export markets have become increasingly important to the fortunes of the dairy industry. And export sales face headwinds including: discontinuation of the European Union quota system, sharp declines in Chinese imports and a 12-year-high in the value of the U.S. dollar.”

 

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