U.S. milk production is in a small growth pattern. According to USDA, in the major 24 states, June milk production totaled more than 17 billion pounds, up just a fraction of one percent from last year. That fractional increase is still supportive of domestic price recovery. Decent price recovery could continue into 2020, according to INTL FC Stone Senior Broker David Kurzawski. “We’ve had several years of rising fixed costs, amid lower milk prices. That’s made for tighter margins. Because of that, there’s lots of pressure on dairy farmers,” says Kurzawski. “They’ve done a good job of culling animals and unfortunately, closing some of their doors. That’s finally starting to work its way into the dairy markets.” Demand remains relatively strong across the board for U.S. dairy products. “If something really derailed demand, like a new wrinkle to the trade wars, that could potentially put a wrinkle in prices, but I think it’s behind us. We’re moving closer to better deals on trade,” he says. “I don’t see things changing too dramatically from a demand perspective. Seasonally, in the U.S., we’re working toward fall demand season.”
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