CHICAGO - Milk prices soared 48 percent this year, jumping more than any other agriculture commodity, but that could end as farmers react with higher production and the highest-priced cheese in 25 years inhibits demand, Bloomberg reports.

Cheese output in this country, the world??s second-biggest producer, could climb 1.7 percent to 196 billon pounds this year, estimated the U.S. Department of Agriculture. Restaurants slashing promos and supermarkets jacking up prices will slow demand, said broker INTL FCStone Inc. Cheese futures could decline 14 percent by the end of this year, according to analysts.

Milk has experienced its highest rally in 15 years with grain demand driving world food prices to record numbers and unrest in the Middle East and northern Africa contributing to the cost of feeding cows. Grain and cotton farmer incomes are predicted to grow more than 20 percent in 2011, but dairy farmers could see their earnings plummet 13 percent, according to the government.

"Grain farmers are having some of the best years they??ve had in a long time profit-wise, but you couldn??t say that for dairy," said Bob Cropp, an University of Wisconsin in Madison economist. "Dairy facilities are running at the maximum. With a little softening in demand, prices are going to come down."

Milk futures reached a 32-month record of $19.65 on Friday, with prices 53 percent higher than a year ago. However, those prices are expected to fall to perhaps $15 because of more milk being produced in New Zealand and Australia.

U.S. milk production will likely increase, according to Michael Swanson, a Wells Fargo & Co. economist. Dairy farmers "expand when prices are good and expand when prices are bad," he said.