Good news and bad news for dairy prices

Has the nation’s dairy industry seen the bottom when it comes to milk prices?

Chris Galen, the Senior Vice President of Communications with the National Milk Producers Federation (NMPF), said that may be the case. That is, of course, good news for dairy farmers, but Galen said there are some negatives in 2015.

“I think that we have seen the worse of the downturn that we were all looking for and expecting to see as 2015 began and that’s the good news,” Galen said. “The not-so-good news is that there isn’t a lot of life in today’s markets and we are going to see tighter margins and lower prices for the foreseeable future. The good news is that the bad news isn’t as bad as we thought and the bad news is that we don’t have a lot of good news to compare it to.”

Galen said we could see the first payments in the new Dairy Margin Protection program this month as well.

“Those farms that signed up at the maximum margin coverage level of $8 a hundredweight will receive DMPP payments, even if it is only a little bit of a payout,” Galen said. “If you were a farmer that chose that option that is a decision that will net you a premium payback when USDA issues those checks.”

Another issue that has the attention of NMPF is Trans Pacific Partnership (TPP), which will allow for more U.S. dairy exports. The TPP involves trade negotiations between the United States and 11 other nations.

“The U.S. cannot give a pass to major countries like Canada and Japan while at the same time increasing access for major competitors into our own market. That is completely unacceptable,” said Jim Mulhern, NMPF president and CEO. “Given that TPP is likely to introduce more competition in a number of key markets, the bottom line is that this agreement must result in a net boost in export opportunities for U.S. dairy producers.”