U.S. Milk Output Rising

WASHINGTON - Sep 12/07 - SNS -- Forecast milk production for the United States in 2007 and 2008 is raised as producers respond to strong milk prices by expanding cow herds through next year, according to the latest forecasts by the USDA's World Agricultural Outlook Board.

High replacement heifer and dairy cow prices indicate strong demand for dairy animals. Milk cow numbers and milk per cow growth in July were higher than expected, but continued tight supplies of alfalfa hay are expected to moderate growth in output per cow into 2008. Despite higher milk production forecasts, demand is expected to continue to support milk prices at record levels in 2007 and near record levels in 2008.

World dairy supplies are expected to remain relatively tight and demand for U.S. dairy products, both domestically and internationally, is forecast to help absorb higher production levels. However, stock forecasts are raised in both years reflecting the stronger production growth forecasts.

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