# Dairy Economic Update: Near-term pain, long-term gain -  | Ag Proud

> Dairy margins weakened in late September 2016 as milk prices fell while feed costs held steady. USDA data showed August milk production up 1.9 percent year on year, with the dairy herd at 9.36 million cows, the highest in nearly 20 years. California Class 4a and 4b prices also declined in September.

- Date: 2016-10-14 · published 2016-10-14T12:00:00.000Z
- Category: report · region US · magnitude low
- Page: https://feedsoft.ai/events/9405-dairy-economic-update-near-term-pain-long-term-gain-ag-proud
- Commodities: [Milk (Class III)](https://feedsoft.ai/c/MILK.md)

## Why it matters

Rising output and a larger herd are weighing on milk prices and margins. Corn stock data was neutral, so feed costs are not adding significant price pressure.

## Read by commodity

- MILK: bearish ▼

## Linked price moves

| Commodity | Date | Window | Change % | z-score | Why linked |
| --- | --- | --- | --- | --- | --- |
| MILK | 2016-10-13 | 5 | -10.1% | -3.7 | August milk output up 1.9% with the largest herd in nearly 20 years signals oversupply that pressures prices, and margins weakened as milk prices fell. |

## Similar past events

| Commodity | Date | Event | 5-day % | 20-day % |
| --- | --- | --- | --- | --- |
| MILK | 2016-05-05 | [Dairy Economic Update: No spring in prices, margin -  \| Ag Proud](https://feedsoft.ai/events/4169-dairy-economic-update-no-spring-in-prices-margin-ag-proud.md) | -6.2% | -6.3% |
| MILK | 2017-04-12 | [Dairy Economic Update: 2017 milk production forecast and price cut -  \| Ag Proud](https://feedsoft.ai/events/71511-dairy-economic-update-2017-milk-production-forecast-and-price-cut-ag-proud.md) | +0.7% | +2.7% |
| MILK | 2023-02-07 | [Economic update: January FMMO Class III-IV prices lower \| Ag Proud](https://feedsoft.ai/events/37364-economic-update-january-fmmo-class-iii-iv-prices-lower-ag-proud.md) | +0.6% | -0.8% |
| MILK | 2017-10-17 | [Mid-October dairy economic update: USDA raises milk production forecasts -  \| Ag Proud](https://feedsoft.ai/events/68461-mid-october-dairy-economic-update-usda-raises-milk-production-forecasts-ag-proud.md) | -0.9% | +0.2% |
| MILK | 2023-03-07 | [Economic update: February FMMO milk class prices back to 2021 levels \| Ag Proud](https://feedsoft.ai/events/36860-economic-update-february-fmmo-milk-class-prices-back-to-2021-levels-ag-proud.md) | 0.0% | +1.6% |

## Sources

- agproud.com: https://www.agproud.com/articles/28313-dairy-economic-update-near-term-pain-long-term-gain

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Data from Feedsoft AI (https://feedsoft.ai/). For information only; not investment advice.