Milk production is expected to post a large increase in 2002, with relatively flat cow numbers and brisk growth in milk per cow. However, insufficient supplies of good forage and replacement heifers are threats to the projected growth. With milk production projected to start posting increases from a year ago, wholesale prices are expected to peak relatively early and slowly slide as the end of 2001 nears. Large increases in milk output are projected to drop wholesale prices in 2002. Commercial stocks going into the autumn probably are adequate but may not be comfortable.
Holdings are still relatively large.
However, the need for stocks may be particularly large because the recovery in production may not be adequate to keep up with demand and because expected market conditions will be relatively risky.