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Milk Output Rose 1.5% in April After Prices Gained

(Corrects spelling of output in headline).

U.S. milk production rose 1.5 percent in April, the Department of Agriculture said, as higher prices pushed farmers to increase herds and boost per-cow output.

Production climbed to 16.662 billion pounds (7.56 billion kilograms) from 16.416 billion pounds in April 2010, the USDA said today in a report. The dairy herd totaled 9.186 million head last month, up 0.9 percent from a year earlier, while the average cow produced 1,814 pounds of milk, up 0.7 percent.

“With the milk price we have, that does help out with profitability and allows more of those animals to enter the herd,” Bill Brooks, a Dearborn, Missouri-based economist at INTL FCStone, said before the report.

Class III milk futures reached a 32-month high of $19.65 per 100 pounds on March 11 as domestic dairy-product demand rose and exports of butter and powdered milk climbed. Milk for May delivery rose 0.01 cent to $16.43 today on the Chicago Mercantile Exchange. The commodity has advanced 23 percent in the past year.

The average price farmers will get for all milk this year will be $19.20, up from $16.29 in 2010, the USDA said last week. Output in 2011 will climb to an all-time high of 195.4 billion pounds, up from last year’s record of 192.8 billion, the USDA forecasts. Production will continue to jump into 2012 to 198.7 billion pounds, according to the department.

Rising demand from Asia has helped to boost U.S. exports. Dairy-product shipments rose 38 percent to 1.609 million tons in 2010 from a year earlier, and exports climbed 37 percent in the first three months of 2011 to 430,519 tons, according to the USDA. Cheese exports last year jumped 62 percent to 38,794 tons, while butter exports doubled to 45,072 tons, data show.

To contact the reporter on this story: Elizabeth Campbell in Chicago at ecampbell14@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

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