Dairy farmers to benefit from rare price boom

Milk production is down in part because dairy farmers culled their herds in recent years to weather the economic downturn. But now demand is up and, with prices dropping for the corn they feed their cows, dairy farmers should see healthy profits through this year, the Wisconsin State Journal reported.

"This is the dairy farmers' year to enjoy," said Mark Stephenson, the director of the Center for Dairy Profitability at the University of Wisconsin-Madison.

Dairy farmers are looking to squeeze every possible drop of milk from their cows, in part because demand for Wisconsin cheese is up domestically and abroad.

Cheese producers already take whatever they can get from Wisconsin dairy producers but now they have to import 15 percent of their milk from other states, said John Umhoefer, the executive director of the Wisconsin Cheese Makers Association.

Wisconsin's specialty cheese producers played a big role in the growth of US cheese exports. Jen Pino-Gallagher, a spokesman for the state's agriculture department, said state cheese exports for the first nine months of 2013 grew 23% compared with the same period in 2012.

The overseas demand is highest in Mexico, Canada and Japan, but Wisconsin's efforts to increase demand in other countries have led to a surge in exports to Panama and South Korea, Pino-Gallagher told the newspaper.

National dairy exports increased 18 percent last year to 1.8 million tons, according to federal statistics. The result is a boost in the average price for all grades of milk to $23.20 (€16.91) per 100 pounds, which tops the previous record of $22.10 (€16.11) set in November 2012.

Despite the rise in milk income for dairy producers, consumers can expect milk prices to remain relatively steady at the grocery store. The price of whole milk has gone up about 8 cents from September to December, according to the US Department of Agriculture.

That's because dairy producers know that if milk prices get too high, they'll lose market share to other beverages, said Doug Wilke, an executive with Baraboo-based Foremost Farms, USA.

"We have to make sure we keep the consumer engaged and coming back to buy dairy," he said.


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