After five months of downward revisions, there is an uptick in the U.S. Department of Agriculture’s predictions for 2012 milk prices.

This morning, the USDA said Class III milk prices will average between $16 and $16.30 per hundredweight this year, up from its prediction of $15.75 to $16.15 last month.

The all-milk price is projected at $17.05 to $17.35 ― again, higher than last month.

Milk prices are projected up on tighter supplies.

"The milk production forecasts for 2012 and 2013 are reduced from last month as higher forecast feed prices are expected to pressure producer returns and encourage a more rapid decline in the cow herd," according to the USDA "World Agricultural Supply and Demand Estimates" report this morning. 

Indeed, the report had some bad news on the feeding front.

Corn will be more expensive.

The average price of corn for the year beginning Sept. 1, 2012, will be between $5.40 and $6.40 per bushel, the USDA says. That is significantly higher than the $4.20 to $5 range predicted just a month ago.

In the last month, drought conditions have emerged across the Corn Belt, which has generated a certain amount of pessimism. The USDA now thinks the corn crop will yield 146 bushels per acre, on average, compared to the 166 bushels it was predicting in the June report.