USDA: Wisconsin milk production slows

WI Public Radio
Prices have been low for the last three years because of an abundance of milk on the market.

MADISON - Wisconsin dairy farmers have broken their streak of year-over-year production increases.

Wisconsin farmers produced about 2.5 billion pounds of milk last month, down 0.6 percent from 2017, The U.S. Department of Agriculture said. It's the second time in almost four years that producers haven't surpassed the previous year's production record.

Bob Cropp, professor emeritus at the University of Wisconsin-Madison, told Wisconsin Public Radio that the slowdown in production is good for milk prices.

"Unfortunately, probably this slow decline was due to some farmers exiting the business because milk prices have been pretty terrible for the last three years and going into this year," Cropp said.

Prices have been low for the last three years because of an abundance of milk on the market.

Cropp said in his monthly Dairy Situation and Outlook report that is the current dairy product prices can hold, average May prices compared to April on the CME could average about 4 cents per pound higher for butter, about 14 cents for cheddar barrels, 4 cents for 40-pound cheddar blocks, 8 cents for nonfat dry milk, and 3 cents dry whey.

“As a result the May Class III price would be near $15.25 compared to $14.47 in April the low of $13.40 back in February,” Cropp said, adding that the May Class IV price would be near $14.45 compared to $13.48 in April and the low of $12.87 back in February.

Some experts believe milk prices may reach $17 per 100 pounds by November, Cropp said. Farmers were receiving less than $14 at the beginning of the year.

“The degree of strength will continue to depend upon the level of milk production and dairy exports,” Cropp said. “The summer weather, quality of forages harvested and the condition of the corn and soybean crop that will impact feed costs will have a bearing on milk production this summer, fall and into winter.”

There were 5,000 fewer cows in the state compared to last year, according to the USDA report. The April report also noted that the increase in milk production has also slowed across major dairy states—which could boost milk prices.

“It now looks like the Class III price could reach near $16 in June and the mid to high $16’s by July and for the remainder of the year,” Cropp said. “The average for the year could end up near $15.60 compared to $16.17 last year.”

The retired UW professor noted dairy margins (returns over feed cost) will improve but the improvement is now being dampen some by higher feed prices.

Some farmers grew nervous as feed supplies dwindled and winter weather held on well into April, said said Darin Von Ruden, president of the Wisconsin Farmers Union.

"Pastures were not growing until the second week of May this year so farmers didn't get cows out on good, green pasture. I've also been hearing of a lot of reports of farmers' feed becoming scarce," Von Ruden said. "To go into the week-long cold stretches that we had, it certainly had an effect on (the animals') environment and their behavior."

Colleen Kottke contributed to this report