U.S. Milk Prices Firm on Smaller Supply

WASHINGTON - Jun 10/-9 - SNS -- The milk production forecasts for the United States in 2009 and 2010 are reduced as higher feed prices further weaken producer returns and sharpen the expected contraction in cow numbers, according to the latest spply and demand outlook from the USDA's World Agricultural Outlook Board.

Growth in milk per cow is also slowed due to higher feed costs. Commercial exports, primarily on a skim-solids basis, are forecast higher in 2009 and 2010 on tighter global dairy product supplies and a weaker U.S. dollar. CCC removals are adjusted to reflect exports under the Dairy Export Incentive Program (DEIP).

Most product prices are forecast higher in the face of tighter supplies, but cheese prices are forecast lower for 2009. The Class III price is unchanged for 2009 but raised for 2010 while Class IV prices are forecast higher for 2009 and 2010. The all milk price is forecast at $11.95 to $12.35 per cwt for 2009 and $15.10 to $16.10 for 2010.

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