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  October 8, 2010

The all-milk price for September topped $17 for the first time since November of 2008. Estimated at $17.20, this is the highest all-milk price in 23 months.

 The Class IV price continues to outpace Class III by 50 cents per hundredweight as USDA announced September’s Class and Component prices last Friday at $16.26 for Class III and $16.76 for Class IV. September’s Class II price was announced at $17.60.

The USDA World Agricultural Supply and Demand Estimates Report Friday (Oct. 8) raised the milk production forecast for this year; but lowered its estimated production for next year due in part to higher feed prices expected for 2011. Fat-basis milk stocks are forecast to remain tight, and the report indicated that relatively tight butter supplies combined with strengthening demand for cheese pushed the USDA forecasted milk prices higher for both this year and next year compared with earlier WASDE estimates.

The All-Milk price is expected to average $16.45-16.55/cwt. for 2010 and between $16 and $16.90/cwt for 2011.

This is said to be causing some discomfort in the countryside where breakevens have increased due to additional debt incurred in 2009 when prices were well below cost of production. $17 is a benchmark that USDA estimated indicate won't be reached as an all-year all-milk average this year or next.






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