A market analyst and broker says dairy farmers might see
another seasonal dip in milk prices because of the cheese market. Mike North with Commodity Risk Management
Group and Vault Ag tells Brownfield cheese production dipped a little, but it’s
still February when demand is weaker. He
says, “The world market is now at about $1.80.
We’ve got blocks that are just shy of $2.00. We’ve got barrels around $1.50, with trading
at a really wide spread right now. It is
quite likely as we try to come back into that world space and gain market share
that we’re going to have to slip below that $1.80 threshold to get some more
market.”
Mike North
North says seasonally, for the moment, milk prices might
drop a little but he’s not expecting prices to be as bad as a year ago. “You probably aren’t going to have to
experience the really low prices that we’ve seen in the last three to four
years of thirteen to fourteen dollar milk as a consequence of maybe $1.20 to
$1.40 cheese. There are buyers waiting
to step into this at $1.60, $1.70 which again could translate into some fifteen
to sixteen-dollar milk.”
And, North says the milk powder market looks much stronger now that large European stocks have been depleted. “China had a record amount of powder imports in December. Now, 90% of that was sourced from New Zealand. They continue to be their primary supplier of that, but as you run New Zealand’s supply shy because remember, milk production is down four-tenths of a percent in New Zealand right now. As you run their supplies lower, it causes everybody else who’s buying powder to start looking elsewhere.”
North says the U.S.
Continue reading Analyst expects milk price dip, but also opportunities at Brownfield Ag News.
