Milk production will continue to grow at a robust rate over the next 10 years, according to projections released Monday by the U.S. Department of Agriculture.  

In the “USDA Agricultural Projections for 2011-20,” the agriculture department  projects that U.S. milk production will increase from 192.8 billion pounds in 2010 to 223.1 billion pounds by 2020, an increase of 15.7 percent.

The number of cows is expected to decline from 9.2 million to 8.9 million over that time, but that will be more than offset by higher milk per cow — projected to increase from 21,160 pounds to 24,950 pounds.

Such increases will temper the milk price. The USDA predicts steady, non-dramatic improvement in the all-milk price (reflecting all classes of milk) from $16.35 in 2010 to $17.45 in 2015 and $18.70 in 2020.

It is yet to be seen if there will be any economic recessions, similar to the one in 2009 that contributed to lower milk prices. The USDA model is based on the presumption that U.S. and world economic growth will move back to steady increases.

Another assumption is the U.S. government’s biofuels policy will remain pretty much the same. The projections assume that the 45-cents-per-gallon tax credit available to blenders of ethanol and the 54-cents-per-gallon tariff on imported ethanol used as fuel will stay in effect through the year 2020. As a result, expansion in the U.S. ethanol industry is projected to continue, which will continue to place price pressure on corn that is used for ethanol production.

In fact, the USDA projections see more and more corn going into ethanol production over the next 10 years — from 4.568 billion bushels in 2009/10 to 5.525 billion bushels by 2020. But, with larger corn crops projected, the percentage of the corn crop going to ethanol will remain pretty much the same. In 2009/10, 34.8 percent of the corn crop went to ethanol, according to the USDA, and that percentage will increase slightly to 35.9 percent by 2014/15 and 36.1 percent by 2020/21.

Meanwhile, the corn price is projected to be between $4 and $5 per bushel for much of the forecast period, ending at $4.25 in 2020/21.