Class III milk has been sitting in the $20 range this past week. Rabobank Dairy Analyst Ben Laine says he thinks the market will stay high heading into 2022. “The market’s been moving upward pretty rapidly. I think we’re seeing a lot of comparisons to the prices that we saw in 2014, in terms of global dairy commodity prices. The markets are tightening, and prices are moving up, but we have to remember back then we kind of came crashing down when the EU released their quota. This time around we don’t have any major levers that could be pulled that would release a bunch of milk onto the market and drive prices back down”. Laine says dairy farmers are seeing higher input costs as well, and herd sizes have decreased in the past year. “In terms of the national milk cow herd, we are definitely seeing a contraction from late spring, early summer. I think we’re seeing the right herd sizes in terms of what’s available for feed, labor costs, and energy.” Laine expects herd sizes to level out with the increase in milk prices.
