American milk price at highest level since 2014

The program agriculture ministry in the United States presented the milk prices for July on Wednesday, July 31. The milk price of Class III for that month amounts to $17,55 per cwt (€15,90 per 50 kilos), which is $1,28 more than in June and $3,45 higher than in July 2018. The milk price is therefore at the highest level since December 2014. The price for Class IV amounts to $16,90 per cwt (€15,30 per 50 kilos), increasing the price by $0,07. Compared to last year, the price is $2,76 higher.

many stoppers
According to the ministry, prices increased during the year mainly due to declining milk production and relatively stable demand. In addition, the American dairy herd has declined, while production per cow increased only minimally. In short: there is less milk. The decline in the number of cows is mainly due to the fact that there are only limited expansion opportunities in the country and that many companies are closing down.

One of the biggest problems for dairy farmers is the fact that there is insufficient feed available; especially for livestock farmers with little liquid assets. Hay of (very) good quality is expensive this year, which is a result of the drought last year and this year. Many American dairy farmers cannot afford this, forcing them to close their businesses.

Positive expectations
Economists at the USDA expect the current price trend to continue through the rest of the year. In general, buyers are more active in the second half of the year, partly because orders are placed for the period around Christmas. However, a drop in the price can never be ruled out, although it will probably be limited.