U.S. milk prices ended 2019 at their highest level in five years, averaging $18.60 per hundred weight. While 2020 may see those gains cool off a bit, they should stay high enough for many producers to start recovering from the doldrums they faced in the second half of the decade. That’s according to National Milk Producers Federation chief economist Peter Vitaliano.

He says the improved prices in 2019 were largely a function of less production. Prior to that the industry strung together several months of surplus milk production which weighed on product prices, with the exception of butter.

Vitaliano sees some economic stabilization of the dairy industry after the exodus of many small operations during the last low price cycle.

He says dairy producers must be vigilant to keep costs under control to stay competitive both domestically and internationally, given the cyclical nature of dairy prices.