Lower Milk Prices Possible in 2008

Feed costs will lower price of milk, but not that much.

Milk prices for all classes in 2007 set new records. Whether that will continue is a question. So far in 2008 milk production estimates are down from previous forecasts according to World Agricultural Outlook Chairman Gerry Bange.

"The reason we came down is simply because of the higher feed prices," Bange says. "We expect that this will result in a slower growth in cow numbers and perhaps slower growth in the output per cow. As we look at that milk-feed price ratio we would expect to see these things slow down given the increases in feed prices we are seeing."

The all milk price forecast for 2008 has been slightly lowered to an average midpoint of $18.30 per hundredweight. That compares to 2007's estimated ending price of $19.15.

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