Missouri Dairy Business Update  
Volume 10, Number 1
January 2010

Milk Prices

According to Robert Cropp's Dairy Outlook, "The Class III price could be in the $15 to near $16.00 range by May and June, above $16.00 by July and in the high $16s by the end of the year. If so, the average Class III for the year could be in around $15.50 to $15.75 and the U.S. All Milk Price around $16.80 to $17.00. But, final prices can well end up either higher or lower than these. Final prices will depend upon what happens to domestic sales, dairy exports and milk production. Milk cow numbers and milk production needs to continue the trend of being below year ago levels. Milk cow numbers were declining and 2.7% below a year earlier last December with an average of 9.2 million head for the year, down 1.2%. Cow numbers are anticipated to continue to decline further in 2010 to an average of about 8.962 million head. Total milk production for 2009 was 189.3 billion pounds, down 0.4% from 2008. USDA forecasts production to decline another 0.4% in 2010 to188.4 billion pounds."

Futures on the Chicago Mercantile Exchange
01-26-2010 Jan 10 Feb Mar Apr May June July Aug Sept Oct
Class III Milk (per cwt.)
$14.54 $14.15 $13.95 $14.05 $14.38 $14.91 $15.42 $15.65 $15.97 $15.87
Class IV Milk (per cwt.)
$14.25 $13.90 $13.90 $14.05 $14.29 $14.61 $14.91 $15.01 $15.19 $15.21
Butter (per lb.)
$1.36 $1.43 $1.45 $1.48 $1.51 $1.53 $1.55 $1.56 $1.56 $1.57
Source: CME Group

Current USDA Milk Price Forecasts
1-20-2010
1st Q 2010 2nd Q 2010 3rd Q 2010 4th Q 2010
Class III Price $13.81 to $14.21 $14.54 to $15.24 $15.20 to $16.20 $15.59 to $16.59
Class IV Price $14.44 to $14.94 $14.47 to $15.27 $14.91 to $16.01 $14.99 to $16.09
Source: USDA, ERS, Livestock, Dairy & Poultry Outlook


Historical Missouri milk prices may be found at: http://agebb.missouri.edu/dairy/mkt/index.htm



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