Missouri Dairy Business Update  
Volume 10, Number 12
December 2010

Milk Prices

According to Robert Cropp's Dairy Outlook, "While dairy futures now show rather depressed Class III prices for the first half of the year and only modest recovery for the second half, prices could show much better improvement the second half. The lower milk prices during the first half along with much higher feed costs will result in unfavorable returns over feed costs. This will likely result in heavier culling from the dairy herd and a reduction in the increase in milk per cow. The inability to catch up on all expenses incurred and lost equity incurred during 2009 will likely increase exiting from dairying. The slow down in milk production, some anticipated improvement in domestic sales as well as lower but still good exports all point to a stronger price recovery second half of 2011."

Futures on the Chicago Mercantile Exchange
12-20-2010 Dec Jan 11 Feb Mar Apr May June July Aug Sept
Class III Milk (per cwt.) $13.74 $13.12 $13.37 $13.75 $14.20 $14.35 $14.60 $15.10 $15.30 $15.44
Class IV Milk (per cwt.) $15.15 $15.25 $15.20 $15.35 $15.41 $15.35 $15.35 $15.35 $15.35 $15.35
Butter (per lb.) $1.64 $1.66 $1.67 $1.72 $1.73 $1.73 $1.74 $1.75 $1.76 $1.76
Source: CME

Current USDA Milk Price Forecasts
12-20-2010 4th Q 2010 1st Q 2011 2nd Q 2011 3rd Q 2011
Class III Price $15.25 to $15.45 $14.05 to $14.55 $14.60 to $15.40 $14.65 to $15.65
Class IV Price $16.15 to $16.45 $14.80 to $15.40 $14.25 to $15.15 $14.45 to $15.55
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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