LongRange Outlook for Milk Prices Scott Brown

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Long-Range Outlook for Milk PricesScott Brown

• An Invitational Workshop for Dairy Economists and
  Policy Analysts
• November 27-28, 2000

www.fapri.missouri.edu
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Assumptions

• Current Law Baseline
• CCC Price Support Program Ends After 2001
• Northeast Dairy Compact Ends Sept 2001
• Crops Policy Continues as Laid Out in 1996 Farm
  Bill
• Average Weather
• Baseline not a Forecast

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Dairy Cows
2000 9.23 Million Head 2001 9.18 Million Head
-7.7
-6.1
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Cow Inventory Change 1990 to 1999
Change in Thousand Head
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Cow Inventory Change 2000 to 2009
Change in Thousand Head
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Milk per Dairy Cow
2.4
2.0
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Milk Production
170.6 Billion Pounds - 2001
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Cheese Consumption
3 Pounds Since 1997 6 Pound Growth 01-11
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Fluid Milk Consumption
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Wholesale Dairy Product Prices
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Milk Prices
2002 WI - -0.50 GA - -1.50
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Variability in Milk Prices (2005)
Milk per Cow and Retail Demand 4 Range Min to
Max
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Nonfat Dry Milk Govt Ending Stocks
gt50 of Annual Production
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U.S. All Milk Price
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Percent Hog Inventory by Size Group
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Percent Dairy Cow Inventory by Size Group
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Summary Wrap-up

• Structure of the Industry Rapidly Changing
• Low Milk Prices Expected in the Absence of
  Weather Events
• Cheese Demand Remains Critical
• Policy Remains Uncertain
• Price Support Program
• Compacts
• WTO