Higher milk prices, limited supplies could carry through 2022

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Higher milk prices, limited supplies could carry through 2022

A dairy analyst says the latest milk production report reflects a trend that’s likely to continue in the U.S. and around the globe for a while.

Ben Laine with Rabobank tells Brownfield lower milk supplies have become part of a sustained trend globally over the past few months partly because of inflationary and feed cost pressures.

“We’ve seen the herd decline, we’ve seen milk production decline—New Zealand and Oceania have been dealing with some weather—and when you put those all together it’s a pretty tight milk market right now,” he says.

Laine says high costs have disincentivized most farmers from increasing production and, if they’d like to, replacement heifers are not readily available.

“It could be beyond a year—we’re going to see higher prices for longer, that’s our expectation,” he says.

Laine compares the current dairy price environment to 2010 through 2014, with more volatility and unknowns given the geopolitical environment.

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