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Idaho milk prices more stable this year

Sean Ellis
The average monthly all-milk price in Idaho through August has been higher and significantly more stable than the past three years. But dairymen say they're more interested in the difference between price and their cost of production.

BOISE — The average all-milk price in Idaho so far this year has not only been higher than the past three years, it has also been significantly more stable.

Since January, the average monthly all-milk price in Idaho has ranged from a high of $19.90 per hundredweight in May to a low of $18.10 in July. That’s a range of $1.80 from high to low.

The average monthly all-milk price high in 2012 was $21.30 and the low was $15.80, a $5.50 swing, according to data that University of Idaho livestock agricultural economist Wilson Gray compiled from USDA and Livestock Information Marketing Center information.

In 2011, the high was $19.90 and the low $15.30, a $4.60 swing and in 2010 the range was $4, from a high of $17.10 to a low of $13.10.

“The range in milk prices has been extremely narrow” compared to the past several years, said UI agricultural economist Paul Patterson. “That’s pretty unusual for milk prices to be that stable.”

Historically, the fact that prices haven’t varied much is unusual but people in the dairy industry are not reading too much into that fact, said Milk Producers of Idaho Executive Director Brent Olmstead.

“Everybody is more worried about the cost of inputs, especially hay,” he said.

The total average Idaho all-milk price through August was $18.78. The average price during all of 2012 was $17.94, and it was $18.42 in 2011 and $14.88 in 2010.

The average all-milk price in Idaho has been higher every month this year than the year before.

Feed costs typically account for 40-50 percent of the cost of dairy production but right now that total is closer to 70 percent, said Rick Naerebout of the Idaho Dairymen’s Association.

The average cost of production for Idaho dairy producers is close to $18.50 per hundredweight right now, he added. The average all-milk price in Idaho was $18.50 in August.

Compared to past years, this year’s milk prices look good, Naerebout said. “But stacked up against feed costs, it tells another story. Just because prices are near historic highs doesn’t mean it’s paying the bills.”

“We haven’t had any dramatic swings this year compared with past years, but in years where it’s not volatile but also not profitable, it’s still frustrating,” Naerebout added.

A moderation of corn prices is part of the reason for the more stable prices this year, Gray said, and a projected record U.S. corn crop this year could push feed prices lower.

“We haven’t seen a lot of volatility in milk prices this year,” he said. “But the big thing for dairy operators is, what is the difference between their milk price and their feed costs.”



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