Milk prices will move higher in the years ahead, according to a report to Congress given by FAPRI (the Food and Agricultural Policy Research Institute at the University of Missouri). FAPRI makes projections based on current policies and doesn't try to anticipate federal dairy and ag policy changes and directions.

FAPRI projects an All-Milk Price of nearly $17 for 201o, an estimate that may have been made before Class III futures for 2010 made significant downturns. The All-Milk Price for 2009 was just $12.79. However, FAPRI has the All-Milk Price averaging between $17 and $18 per hundredweight between 2011 and 2013 and rising to between $18 and $19 for 2014 through 2019.

The projections have the Class III price averaging $15.41 for 2010, although the futures prices currently are averaging just over $14. FAPRI has the Class III price averaging in the upper $15s during 2011 and 2012, rising to more than $17 by 2019.

Cow numbers during 2010 will not average below 9 million head as USDA predicted earlier, according the FAPRI projections. The report puts cow numbers for 2010 at 9.024 million head, but averaging fewer than 9 million head each year through 2019.

FAPRI projects total milk production to climb 1.1 percent per year between 2011 and 2019, topping 200 billion pounds in 2015 and reaching 209.2 billion by 2019.

Milk yield per cow is expected to go up about 1.3 percent per year, reaching nearly 23,500 pounds by 2019.

Stronger world prices will help drive U.S. milk prices, according to FAPRI projections. The world price of cheese is expected to be between $1.60 and $1.80 a pound between 2011 and 2019. The nonfat dry milk price could run between $1.25 and $1.40 a pound.

Fluid milk per capita consumption in the U.S. will stay flat or decline, but cheese consumption per person is expected to continue to rise reaching 34.2 by 2019.

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