2022 looks like it could be a good year for dairy producers with milk prices above $20. AgDairy market analyst Robin Schmahl says that’s being driven by lower U.S. milk production and fewer cows in the national herd as producers react to higher production costs.

He says the other factor driving up prices is strong domestic and export demand, especially for cheese.

Schmahl says those fundamentals are keeping milk futures above $20 per hundred weight for most of 2022 and offering some profitability for producers.

He recommends dairy producers use options strategies to lock in milk prices and still leave the topside open. They should combine that with Dairy Revenue Protection.