MISSISSIPPI STATE -- Finally, dairy producers have something more than a nutritious product to celebrate during National Dairy Month: milk prices.

"Milk prices should average about $2 more per hundredweight than last year," said Bill Herndon, agricultural economist with Mississippi State University's Extension Service. "That's about a 15 percent increase over 2000."

Herndon said prices will likely remain strong throughout the summer and peak-usage period in early fall. Class I milk prices have the potential of record prices this fall.

"Tight supplies are driving these prices. Milk production is down about 2 percent compared to what it was in 2000, and demand has been good, especially foreign consumption," he said. "European concerns about animal diseases have contributed to the increase. People are replacing meat protein intake with dairy products."

The current Class I milk prices for June are just over $18 for the North Mississippi region. Herndon speculated that producers could see another $2 increase by early fall.

The dairy industry is not the biggest agricultural industry in Mississippi, but it is important to the state economically.

"Mississippi's dairy industry generated $317.6 million in economic activity in 2000," he said. "Mississippi dairies produced almost 65 million gallons, or 544 million pounds, of milk."

The Southeast is a milk-deficit region that does not produce enough milk to meet the fluid needs of the population. Mississippi dairy cows each produced an average of almost 6 gallons of milk per day, enough to make almost 5 pounds of cheese or more than 2 pounds of butter.

Angelica Chapa, Extension dairy specialist, said Mississippi's dairy herds have decreased in number, but increased in size. Still, the total number of dairy cows in the state has dropped about 70 percent over the last decade.

"In 1990, Mississippi had 653 Grade A commercial dairies, compared to 328 in December 2000," she said. "There were 51,000 dairy cattle in 1996 and that number had dropped to 36,000 at the end of 2000."

Chapa said the challenges of recent droughts had made feed costs a big issue in recent years.

"Producers who had relied on grazing in their feeding program had to purchase supplements or feed more hay sooner than expected. That led to increased feed costs and reduced hay inventories," she said.

The recent rains are a mixed blessing for farmers. Rains greatly benefit pastures, hayfields and crops, but lying in mud likely will increase the cattle's problem with mastitis.

"Mastitis-causing organisms are everywhere in the environment, so when muddy cows come into the parlor, it is very important that only dry clean udders are milked to help reduce the risk of mastitis," she said.