New Delhi, December 09, 2021: Dairy farmers who endured paper-thin margins in recent years have reason for optimism in the year ahead.
USDA’s current price projections for 2022 surpass the $20-mark (at $20.25 per hundredweight) for all milk, with Class IV and Class III average price estimates close behind at $18.70 and $17.75, respectively.
If realized, the price increases for the three milk classifications would range between 80 cents and $2.70 per hundredweight above USDA’s November 2021 estimates.
“There’s reasons to finally be upbeat in dairy,” Dan Basse, president of AgResource Company in Chicago, said recently at the annual Agricultural Bankers Conference. “It’s taken us eight years to get back to where we were in 2014 (if milk prices surpass $20).”
Basse estimates Class III and IV milk prices could reach as high as $21 to $23 next year, driven by surging demand, a possible smaller supply and inflationary pressure.
Longer-term, a proposed shift in ag policy in the European Union could shift the EU market from a net exporter to net importer of dairy.
“World demand for dairy products remains strong,” Basse said. “I believe exports are the bullish driver of the future.”
The U.S. exported an all-time high of 16% of milk solids produced nationwide in 2020. And, exports so far this year, from January through September, bubbled a whopping 14% above last year’s record pace.
