(click on image to enlarge)
USDA's milk projections can be found at the above link. I've compiled a graph and also pasted their reasoning. The thing which disturbs me the most with USDA's thinking is the robotic quality. There is no room, in their thinking, for human choice. Furthermore the contrived complication of dairy dairy pricing insures no one will ask what kind of farm community do we want to have?
Milk production is projected to continue rising over the projection period, although at a slower pace than in the past several years. An upward trend in output per cow continues, but the 4-year increase in milk cow numbers from 2004 to 2008 ended during 2009.
• After a relatively sharp drop in 2009-10, milk cow numbers are expected to resume a more typical path of year-to-year declines. However, projected annual reductions are more moderate compared with past years. As the transition from small, diversified farms to large, specialized dairy farms matures, cow numbers decline at lower rates and level off toward the end of the projection period.
• Milk output per cow is projected to increase through the projection period, reflecting continued technological and genetic developments and the transition from smaller, diversified farms to larger, specialized dairy operations in most regions.
• Domestic commercial use of dairy products increases somewhat faster than the growth in
U.S. population over most of the next decade. Cheese demand benefits from greater consumption of prepared foods and increased away-from-home eating. However, per capita consumption of fluid milk is expected to continue to decline slowly.
• U.S. dairy product exports decline from the levels reached in 2008 but remain high by historical standards. Exports on a skim-solids basis fall less than fat-basis exports because of commercial sales of dry-milk products, as the United States is projected to be a competitive exporter of non-fat dry milk through the projection period.
• Farm-level milk prices have fallen from the high levels of 2007 and 2008, due in part to lower exports of U.S. dairy products. Prices are projected to rebound somewhat in 2010 as production decreases in response to lower 2009 prices. Following continued production and price adjustments through 2012, milk prices rise steadily over the latter part of the projection period. However, prices increase less than the general inflation rate largely because of efficiency gains in production resulting from technological improvements and consolidation in the sector.