MADISON, Wis. — The nation’s dairy farmers can expect 2011 to be a second straight year of modest growth, according to a report released Wednesday that offers a small dose of optimism to an industry still recovering from a devastating 2009.

Feed costs for dairy cows will be higher for at least the first half of 2011, but increased milk demand will help drive sales and revenue, according to the report by Wisconsin researchers. Wisconsin is the No. 2 milk producer in the nation behind California.

“I think 2011 could be a good-enough year” for milk prices, said Mark Stephenson, a dairy expert at the University of Wisconsin-Madison who contributed to the report. “I think 2010 was a treading-water sort of year. There was a lot of equity lost on dairy farms across the country in 2009. It would take much better prices to make up for that.”

The average dairy farmer needs to earn about $16 per 100 pounds of milk to break even. Prices languished at $12 in 2009, their lowest point in seven years.

The market began to turn around in 2010, and U.S. dairy farmers earned an average of $16.30. However, the return to profitability meant little to many dairy farmers who were still struggling under a mountain of debt.

A second year of growth will help those producers, even if the growth continues to be modest, Stephenson said.

“I’d say many of them are feeling cautious but hopeful,” he said.

Milk prices collapsed in 2009 because of too much production and not enough demand. Dairy producers across the U.S. responded by slaughtering an average of 50,000 dairy cows a week because the glut made it impossible to sell their milk for what it cost to produce.