Milk, grain prices projected up in this morning’s USDA report

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The drought is raising prices across the board, including milk prices.

This morning, the U.S. Department of Agriculture said Class III milk prices will average between $16.50 and $16.70 this year, up from the prediction of $16 to $16.30 last month.

The all-milk price is projected at $17.55 to $17.75 ― again, higher than last month.

The most telling numbers in this morning’s report are the yield projections for corn and soybeans. Projected corn yield is now 123.4 bushels per acre, compared to last month’s estimate of 146 bushels per acre. Soybean yield has been projected downward from 40.5 bushels per acre to 36.1.

Perhaps the most startling number in the whole mix: The average price of corn for the year beginning Sept. 1, 2012, will be between $7.50 and $8.90 per bushel, the USDA says. That is significantly higher than the $5.40 to $6.40 range predicted just a month ago.

The drought is responsible for all of this. With regard to milk prices, the drought is seen putting downward pressure on production, which will raise prices. 

“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,” the USDA said in this morning’s “World Agricultural Supply and Demand Estimates” report. “Milk per cow is also reduced due to tighter feed supplies.”

To access the full “World Agricultural Supply and Demand Estimates” report, click here.

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Barb T.    
Union County  |  August, 10, 2012 at 09:06 AM

Hey, Someone better soon get AWAKE !!! Wow, the price of milk is going up. Don't forget it cost the dairy farmer $25.00 or more per cwt. to produce the milk. With grain prices and all our other costs increasing every day, how long can we go with 17.00/cwt payment. The other day I received an e-mail stating that the dairy farmer could break even at 18.00/cwt. Don't know where that person came from and besides why should we dairy farmers just break even. We need a profit just like other industries. Needless, to say our government officials have no concept what we are all about out here in the country producing food for our people. I think they want all of our food to come from other countries. They export our grain and forget all about the livestock producers in United States. They predict the crop yield before the crop is hardly out of the ground. Remember, you guys do not control the weather and nature. Someone alot more important does that. So, get awake and smell the roses before it is too late. It is getting very close or already may be too late. How would you like getting half of a paycheck?

David bell    
Sault ste. Maire  |  August, 12, 2012 at 07:55 AM

My closest neibor dairy farm is done and I'm borrowing money to buy feed and fuel

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