Dairy Prices Predicted to Rise
Bob Cropp, professor emeritus and dairy markets analyst from the University of Wisconsin, has predicted that Class III prices could average $17 this year, although there is a possibility they could do a little better than that.
In its report, USDA also raised its estimates of the all-milk price for 2012. The all-milk price is now expected to average between $18.30 and $19.10 for the year, compared to last month’s estimate of $18.10 to $18.90.
Dry whey futures prices continue to rise, as they did all of last year. Both the February and March dry whey futures have passed the 70-cent mark. Whey has experienced a renaissance in recent years as more food companies, including sports-drink manufacturers, utilize whey protein.
Meanwhile, Greg Scheer, dairy analyst for Doane Advisory Services in St. Louis, offers these comments on the latest WASDE report. “USDA’s Supply/Demand report was relatively neutral for the milk market," he said. "Estimated 2011 production was trimmed slightly, but the 2012 production estimate was left unchanged. USDA is forecasting a 1.3% increase in milk production in 2012 versus the 1.7% increase year-over-year in 2011. A slight reduction in forecast cheese prices for 2012 was more than offset by projections for higher non-fat dry milk and whey prices. The midpoint all-milk price estimate was raised to $18.70 per cwt compared to the December estimate of $18.50 per cwt."
From the January 13, 2012, Prepared Foods' Daily News.