Higher milk prices dominate talk at WDMC

Hoard's Dairyman: 

Higher milk prices dominate talk at WDMC

Date: 
Fri, 03/11/2011

Higher milk prices and the optimism they inspire are translating into a large, positive crowd this week at the 10th Western Dairy Management Conference in Reno, Nevada, that concludes today.

Total registration is 1,570 for the every-other-year event, a strong increase from 2009 when the dairy industry was just entering its recent recession. Producers from across the country and the world, as well as industry suppliers of all types, are packing the seminar rooms for 16 presentations on topics ranging from global dairy market perspectives and outlooks, to employee relations. All presentations are geared to deliver practical information that producers can take home and immediately begin to incorporate into management and planning on their own farms.

Out in the hallways and at meals, higher milk prices are dominating discussion. Optimism and increased confidence are obvious, although concerns about how high feed prices may go are close behind.

On the milk price side, the outlook continues to be strong for 2011, according to Bill Plourd, President of Blimling and Associates in Cottage Grove, Wisconsin. His consulting firm’s forecast is that Class III prices will average $17.19 per hundredweight for the year, which would be the third highest level in history. Class IV prices are projected to average $18.56.

Other speakers, however, pointed out that feed prices – both domestically and globally – are likely to remain volatile and could significantly blunt the net returns of $17 milk. As one producer told us, I wonder if the old days of $3 corn and $12 milk weren't more profitable than $7 corn and $17 milk.