Dairy Outlook.

March milk production for 20 major reporting states was up 4% from a year ago. This is the second straight monthly 4% increase. Relatively good milk prices in previous months, ample supples of relatively cheap feed and favorable weather all contribute to this strong production increase.

The April Basic Formula Price may not differ far from the March price of $11.62. Looking further down the road, dairy farmers may want to consider buying PUT options, at least for some of the near months. If milk production continues to run well above a year ago levels, there will be downward pressure on milk prices, especially if weather remains favorable.
(Bill Thomas)

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