Professor Bob Cropp’s December 2014 Dairy Situation & Outlook full report is available for download from the UW Understanding Dairy Markets website. The following is a portion of that report:
The December Class III price will be near $17.75 compared to the peak of $24.60 back in September and $21.94 in November. But, as we move into 2015 increased milk production and lower exports means milk prices will fall further. By January the Class III price could be down to about $16.30 and falling to the $15’s February through August before showing some strength and peaking in the high 16’s in October or November. Some forecasters have the Class III price falling below $15 this spring which is not without a possibility.
Not until the growth in milk production slows to 2% or less and/or exports pick up can we expect milk prices higher than this. Lower feed cost will ease some of the pain of lower milk prices, but margins will be far from the record margins experienced this year. One positive is an expected stronger growth in the economy during 2015 and dairy product prices will be lower, both of which should result in good growth in domestic sales to help to support milk prices.
Source:uwex.edu