Prices for milk increase

The recent increase in milk price at the farm gate reflects the change in supply and demand for milk and is determined by a national pricing scheme that is predominantly based on the demand for cheese and butter, according to Cornell Cooperative Extension Specialist Bob King.

King reported that milk prices are starting to recover from record lows and there has been a steady rise in the price of milk over the last several months. Some of the increase reflects a season fluctuation of an increase in demand for milk and a decrease in supply.

An increase in demand has occurred due to schools being back in session and the making of cheese in anticipation of the holiday season. Most cheese processors have worked down their inventories and are building them back up for the holidays.

On the supply side, there has been a reduction in cow numbers nationwide and recent hot and humid weather has decreased production per cow, especially in New York.

Due to this increase in demand and decrease in supply, dairy farmers may see as much as a $3 increase per hundredweight for raw milk by year's end, effectively increasing the current price of milk from about $12 per cwt. to as much as $15 per cwt.

State stats

  • New York dairy herds produced 1.02 billion pounds of milk during July, according to the New York Agricultural Statistics Service. This total is down two percent from the July 2002 level. The decrease was the result of fewer cows milked and a lower rate per cow.
  • The number of milk cows totaled 679,000 head, down 1,000 head from July 2002. Milk per cow averages 1,500 pound, 35 pounds less than July 2002.
  • Milk producers in New York state received an average of $12.10 per hundredweight for milk sold during July, up 30 cents from both the previous month and from the year earlier.

U.S. stats

  • Milk production in the 20 major states during July totaled 12.4 billion pounds, up 0.6 percent from production in these same states during July 2002. Production per cow averaged 1,590 pounds for July, up 12 pounds from July 2002. The number of cows on farms in the 20 major states was 7.77 million head, 15,000 head less than July 2002.