|110th Year, 48th Issue||Thursday, July 8, 1999||Sparta, North Carolina|
The dairy industry is changing.
Market conditions in 1999 and 2000 are expected to be much different than the sluggish milk production of record farm milk prices of 1998. Recent relatively high producer returns are expected to unleash a surge of milk production in most of the nation.
Sufficient production will overtake projected milk demand and cause farm milk prices to drop sharply. However, the timing of these developments is highly uncertain. The full brunt of the production expansion is projected to arrive in 2000.
Milk Production Expansion Begins
A number of cross-currents affected 1998 milk productions. Concentrated feed prices began the year somewhat high but fell considerably. Weather effects were quite adverse in some regions at some time but were quite favorable at other places and times.
The key feature of 1998's milk production was the failure of output, for most of the year, to respond to high prices. Except for weather-related aberration, milk production was essentially flat from late 1995 until the autumn of 1998.
Although the exit of dairy farmers may not change much, the pressure of recent returns should spur expanding producers to pick up the pace. Even without optimal forage conditions, milk per cow should post a large gain, although it may not fully return to trend after the sluggishness of recent years.
Expansion in milk production is projected to accelerate gradually during 1999.
Alleghany Dairy facts
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