Tuesday, February 22, 2011
(click on images to enlarge)
USDA recently released its "Agricultural Long Term Projections" which are available at: http://www.usda.gov/oce/commodity/ag_baseline.htm
The latest, released this month shows milk price projection through 2020. You can go back tho the report issued in February 2008 and see how they did projecting the "All Milk Price" for 2009. Or you can just look at the graphs above.
At the moment the Class III futures for 2011 are all above USDA's projected "All Milk Price."
My problem is not with USDA's attempts at a rational projection. The problem is, who knows what a relatively small number of players are going to do about farm milk price? Neither USDA nor the chosen few are really able to think in terms of complexities. That is too bad.