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The Outlook for Dairy Markets

The Outlook for Dairy Markets. Scott Brown browndo@missouri.edu Midwest, Great Plains, and Western Outlook Conference Indianapolis, IN August 14, 2007. Agenda. High feed costs was the headline issue in early 2007 By Spring 2007, the issue turned to strong international demand

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The Outlook for Dairy Markets

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  1. The Outlook for Dairy Markets Scott Brown browndo@missouri.edu Midwest, Great Plains, and Western Outlook Conference Indianapolis, IN August 14, 2007

  2. Agenda • High feed costs was the headline issue in early 2007 • By Spring 2007, the issue turned to strong international demand • The strong demand has lead some domestic retail dairy prices to record or near-record levels • Where do go from here • Effect of strong prices on demand? • Who begins to increase production?

  3. Milk Production Cost Increases

  4. All Milk Price, United States

  5. Milk Cows, United States

  6. Milk Cows, United States

  7. Milk Yield, United States

  8. Milk Yield, Change From Previous Year, United States

  9. Milk Production, United States June, 2007 1.2% Higher than Year Ago

  10. Cheese Production, United States

  11. Nonfat Dry Milk Production, United States

  12. Australian Drought Continues

  13. Milk Production, Australia

  14. EU SMP Intervention Stocks

  15. EU Butter Intervention Stocks

  16. EU Dairy Export Subsidy Expenditures

  17. US Nonfat Dry Milk Government Ending Stocks

  18. Skim Milk Powder Prices 2006 Global Imports: 491 tmt 2006 Global Exports: 1,007 tmt

  19. Butter Prices

  20. Cheese Prices

  21. Class III and IV Milk Prices

  22. All Milk Price, United States

  23. Retail Whole Milk Price, United States

  24. Retail Cheddar Cheese Price, United States

  25. Dairy Forecast

  26. Summary • Current dairy policy does not play a role at these prices • US dairy industry now being driven in part by international markets • A cutback in international demand could result in a quick adjustment to US milk prices • Higher feed costs will tend to slow supply growth in the US • Corn prices • Hay prices • Reaction of consumers to record product prices

  27. Thanks for the opportunity to show my ignorance at these record dairy prices!!!

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