Source: Agrifax, USDA
Milk prices in the US have stayed above year-ago levels throughout this year. The preliminary all-milk price for September is US$25.30/cwt. This compares to an average of US$20.05/cwt in 2013.
The opposite has been true for feed costs all this year. The 16% protein commercial dairy feed ration which is comprised of corn, soybean and alfalfa hay has tracked below year-ago prices this year.
This has resulted in favourable margins which has given farmers the incentive to maximise production.
The USDA forecasts 2015 milk production to grow 3% compared to this year.