Some increased DEIP activity may help to reduce nonfat dry milk stocks and lend some price strength. F arm level milk prices will not strengthen until cheese prices begin to recover. Recovery will occur, but the question is when and how fast. There are a lot of factors that weigh in here. Hay stocks as of May 1,1997 were lower compared with last year in 27 of the 48 estimating states.
Reports are that first cutting hay is short in Midwest and northwest states.
What happens to hay production the reminder of the summer and the production of corn, soybeans and other crops are key to future milk production and milk prices. Poor hay, grain and oilseed crops would add strength to milk prices this summer and fall. But favorable crops will dampen price increases. Related to crop conditions is how weather impacts milk per cow. Cooler summer weather means cows will milk better that hot and humid weather.