1. The University of Georgia College of Agricultural & Environmental Sciences Dr. Tommie L. Shepherd Dr. Tommie L. Shepherd Center for Agribusiness and Economic Development 2010 Dairy Outlook 2010 Dairy Outlook

2. The University of Georgia College of Agricultural & Environmental Sciences It’s Been a Heck of a Ride!

3. NASS SurveyClass Prices Class I Price Class II Price Class III Price Class IV Price

4. Make Allowance =.165 1.1299 $ NASS Cheese Price Survey

5. .9649 $ Value of Protein in Cheese NASS Cheese Price Survey

6. .9649 $ Yield x 9.3452 = Factor $9.35 Value of Protein on 100 lbs. of Milk

7. Fluid Consumption The U.S. “Milk Bucket”

8. The University of Georgia College of Agricultural & Environmental Sciences What Were the Drivers of Milk Prices in 2009?  Milk Production (Supply)  Dairy Cow Numbers  Milk Per Cow

9. The University of Georgia College of Agricultural & Environmental Sciences A Very Brief History of Milk Production

10. The University of Georgia College of Agricultural & Environmental Sciences U.S. Cow Numbers 2005-2009

11. The University of Georgia College of Agricultural & Environmental Sciences Milk Per Cow 2005-2009

12. The University of Georgia College of Agricultural & Environmental Sciences What Were the Drivers of Milk Prices in 2009?  Milk Production (Supply)  Dairy Cow Numbers  Milk Per Cow  Milk Consumption (Demand)  Fluid Demand

13. The University of Georgia College of Agricultural & Environmental Sciences Fluid Milk Sales 2005-2009

14. The University of Georgia College of Agricultural & Environmental Sciences What Were the Drivers of Milk Prices in 2009?  Milk Production (Supply)  Dairy Cow Numbers  Milk Per Cow  Milk Consumption (Demand)  Fluid Demand  Commercial Disappearance Cheese +3.6% Butter -2.0% Milk Powder -13.0%

15. The University of Georgia College of Agricultural & Environmental Sciences What Will Drive Milk Prices in 2010?  The Good News  A Weaker USD Will Improve Exports  Feed Costs Will Decline  171,000 Fewer Cows Will Decrease Production  The Bad News  Large Supply of Replacement Heifers  Recovering Production in NZ and Australia  EU Subsidies for Dairy Exports  Can’t Say For Sure  Temporary Increase in CCC Support Prices

16. The University of Georgia College of Agricultural & Environmental Sciences Temporary Price Support IncreasesNDM$0.80$0.92Cheese(Blocks)$1.13$1.31 Cheese(Barrels)$1.10$1.28 Butter$1.05$1.05 OriginalAug/Sep/Oct

17. The University of Georgia College of Agricultural & Environmental Sciences If The Markets Are Correct....

18. The University of Georgia College of Agricultural & Environmental Sciences If The Markets Are Correct....

19. The University of Georgia College of Agricultural & Environmental Sciences The Last Time Prices Were Near Support....

20. The University of Georgia College of Agricultural & Environmental Sciences Watch for Falling Prices

21. The University of Georgia College of Agricultural & Environmental Sciences So If The Markets Are Correct....

22. The University of Georgia College of Agricultural & Environmental Sciences We Should See Some Price Recovery

23. The University of Georgia College of Agricultural & Environmental Sciences A Few Trends Worth Noting  The Southeast Continues to Loose Milk Production  The West Has Lost Cows – But Not Necessarily Milk Production  Production Increases in the Midwest and Northeast

24. The University of Georgia College of Agricultural & Environmental Sciences Got Questions?