Missouri Dairy Business Update  
Volume 10, Number 6
June 2010

Milk Prices

According to Bob Cropp's Dairy Outlook, "Milk prices will strengthen further as the year progresses. How much prices will improve is all depended upon the level of milk production, domestic sales and dairy exports. As of June 18th, Class III futures don’t show a lot of improvement. Class III futures don’t hit $14 until September and reach a high of $14.70 for October and end the year with December at $14.55. Class III futures for 2011 are rather flat all year in the mid to high $14’s. However, history shows that milk prices are very sensitive to small changes in milk production and/or sales. A lot can happen with these factors between now and the end of the year. For example, summer weather can significantly impact milk per cow. How many cows will be removed by the 10th round of CWT is a factor. The probability that Class III milk prices will end up higher than is what is currently shown by Class III futures is greater than prices ending up lower. But, the recovery in milk prices will not reach levels forecasted at the beginning"

Futures on the Chicago Mercantile Exchange
6-25-2010 June July Aug Sept Oct Nov Dec Jan 11 Feb Mar
Class III Milk (per cwt.) $13.63 $13.55 $13.85 $14.64 $14.68 $14.59 $14.50 $14.45 $14.33 $14.40
Class IV Milk (per cwt.) $15.42 $15.55 $15.21 $15.24 $15.26 $15.26 $15.05 $14.88 $14.71 $14.88
Butter (per lb.) $1.59 $1.69 $1.71 $1.71 $1.72 $1.72 $1.69 $1.61 $1.59 $1.60
Source: CME

Current USDA Milk Price Forecasts
6-18-2010 2nd Q 2010 3rd Q 2010 4th Q 2010 1st Q 2011
Class III Price $13.20 to $13.40 $14.15 to $14.65 $14.75 to $15.55 $13.85 to $14.85
Class IV Price $14.65 to $14.95 $15.25 to $15.85 $14.80 to $15.70 $14.35 to $15.45
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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