A sharp increase in the demand for protein is expected to improve the price farmers get for their milk. That will be tempered by predictions that the high price of crude oil will increase what they pay for cattle feed.

Penn State dairy economist Ken Bailey is optimistic that despite near record lows this year in the price farmers are paid for their milk, 2007 will see significantly higher prices.

“The futures markets are taking off,” he said. “Cheese, non-fat dry milk and whey are strong.”

The reason for the bright future is an increased global demand for protein.

Indications are the demand will push the price per hundredweight dairy farmers have received in 2006 from $12.90 up to $15 next year, Bailey said.

Source:The Tribune-Democrat