In addition, early Fall marks the start of a robust demand period for most dairy products as retail pipelines begin to fill for the holiday season. As a result, wholesale prices for dairy products increased in recent weeks, leading to higher farm milk prices.

While U.S. milk production was 5% higher in the first quarter of 2006 when compared to the same quarter last year, the U.S. Department of Agriculture (USDA) reports that milk production in July and August was only 1.5% higher than during the same months last year. Meanwhile, total dairy product sales were 2.8% higher (on a milkfat equivalent basis) in the first six months of 2006 compared to the same period in 2005.

Source: idfa.org