The Milk Flows, But Dairy Business is Drying Up

Dairy farmers have always dealt with big swings in milk prices. But now that that swing is hovering at some of the lowest prices per hundredweight since 2006. The USDA’s mid-January report predicted prices to fall to under $16 per hundredweight in February and beyond, a far cry from 2014 milk prices which exceeded $24 per 100 lbs. The underlying facts behind the price decline include an oversupply of milk in the United States and the closing or shrinking of what were reliable export markets a year ago. Additionally, the record prices of last year prompted a lot of farmers to add more cows, and U.S. milk production rose 4 percent — while U.S. consumption of milk, cheese, yogurt and ice cream has remained more or less steady.