Milk prices rise; grain, fuel follow

US - The good news for Vermont's 1,150 dairy farms is that milk prices are slowly on the rise. The bad news is that much of that gain is being eaten up by higher grain costs and fuel prices
calendar icon 18 December 2006
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"Grain prices have gone up tremendously in the last month, concern being ethanol use and also some of the large retirement funds and hedge funds … are buying into the future markets for corn and have caused the price to rise," said Diane Bothfeld, a senior agricultural development specialist with the state Agency of Agriculture, Food and Markets.

Milk support prices, which earlier this year had been in the low $12 per hundredweight range, have slowing climbed to $13.50 to $13.75 per hundredweight. That upward trend is expected to continue into next year where the average price for 2007 is expected to average $15.11 per hundredweight, a sharp improvement over this year's projected average of $12.88.

"Quite an increase but really with the increased in grain costs, increased cost for fuel which really haven't gone down much, especially diesel fuel, their costs are still going to eat up the majority of that price increase," Bothfeld said.

Source: Times Argus

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