The figure below shows the 12 month rolling average percent change in milk production for the United States
over the time period 2000 to the most recent month for which production data is available.  The lowest Class 3 price
after the peak in the growth rate for production is shown.  There appears to be a pattern in that this low price point
occurs three to four months after the production growth peak is recorded. 
As the rate of growth in U.S. milk production expands over the next 16 - 20 months, the Class 3 milk price will decline. 
How low the milk price will go depends on the balance between total supply and consumer demand during this period.

A new factor to consider is the strength of International demand in the skim powder/whey market.

Now entering 2008 we must watch the U.S. cheese market, as the current strength in Class 3 comes from this commodity.

The annualized rate of growth in milk production ending February was over 5%.  If this continues into the spring months expect milk prices to continue down.

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