Mississippi dairy farmers have a reason to celebrate dairy month (June), but don’t expect a big party.

Bill Herndon, dairy economics specialist with the Mississippi State University Extension Service, said farm-level milk prices have reached what he described as a “magical $20-per-hundredweight level.” Unfortunately, feed, fuel, energy and fertilizer costs all have increased at about the same rate as milk prices.

In 2006, Mississippi dairy farmers received about $14.60 per hundredweight, or nearly $1.23 for each gallon of milk produced. Herndon credited the strong export market for the price improvements.

“The export market is triggering an evolution in the U.S. dairy industry as nonfat dry milk and dried whey are driving milk prices instead of the traditional cheddar cheese and butter products,” he said. “Nonfat dry milk and dried whey prices are at record levels, while cheese and butter are modestly priced in comparison.

“The good news is that milk prices are up, but the bad news is that so are feed and energy costs,” Herndon said. “Milk prices are up 35 percent to 40 percent, but so are the prices for cattle feeds such as corn, soybeans, alfalfa and cottonseed. Dairy farmers are not realizing additional profits.”

The economist predicted milk prices will remain strong throughout the year.

The number of dairy farms has been on a steady decline for several decades across the state and nation. In 2006, Mississippi had 190 Grade A commercial dairy farms. Cash receipts for the sale of milk was almost $50 million, and the state’s dairy industry generated an estimated $208 million in economic activity.

Walthall County Extension director Lamar Adams said his county has lost about 50 dairies in the last 17 years. The average age of the remaining dairy farmers is 65 years and older, suggesting that many more farms will be closing in the years to come.

“The mood is not good in the dairy business. Farmers appreciate the higher milk prices, but the input cost increases are negating any profit improvements,” Adams said. “Down here, we are still trying to recover from Hurricane Katrina.”

Walthall County is home to 40 commercial dairies. The next-largest numbers are found in Lincoln County with 25 dairies, Pike County with 19, Marion County with 17, Amite County with 12 and Newton County with nine.