Economist: Dairy Price Spreads Normalizing in First Half of 2021

A restoration of more “normal” pricing between Class 3 and Class 4 milk and USDA purchases of cheese and butter will anchor a return to stronger demand, though it might cause some oversupply toward the midpoint of 2021, according to new dairy market analysis. Butter supplies are at high levels right now, but USDA food programs should help ease any worries about supply-driven market erosion, according to one ag economist this week. Keep your eye on government dairy purchases as well as the price spread between Class 3 and 4 milk products for direction on the overall dairy market heading further into 2021, he advises. See more on the dairy market in the new year.