Missouri Dairy Business Update  
Volume 11, Number 5
May 2011

Milk Prices

According to Bob Cropp's Dairy Outlook, "Milk prices will show further weakness in May and down considerably from the peak back in March, yet prices are much improved over a year ago. The May Class III price will be near $16.45, down about $0.45 from April and $3.00 from March, but about $3.00 higher than a year ago. The Class IV price continues to show strength with May near $20.00 up about $0.30 from April and $4.70 higher than a year ago. The advanced Class IV price continues to be the mover of Class I. The May Class I mover was announced at $19.75, $5.95 higher than a year ago. The U.S. All Milk price will average near $18.50 for May, down about $1.20 from April and almost $2.00 from the peak in March, but still about $3.50 higher than a year ago.

We could see some strengthening of milk prices beginning as early as June. The Class III price could well be above $17.00 and reaching near $18 by September or October. The Class IV price is likely to stay close to $20 until fall before declining to the low $19’s or high $18’s by year’s end. This price strength hinges on future milk production, domestic sales and continued strong dairy exports."

Futures on the Chicago Mercantile Exchange
5-31-2011 May June July Aug Sept Oct Nov Dec Jan 12 Feb
Class III Milk (per cwt.) $16.54 $18.75 $19.69 $19.22 $19.04 $18.40 $18.05 $17.50 $17.10 $16.60
Class IV Milk (per cwt.) $20.21 $20.80 $20.56 $20.50 $20.20 $20.05 $19.74 $18.97 $17.75 $17.50
Butter (per lb.) $2.02 $2.16 $2.16 $2.17 $2.18 $2.16 $2.17 $2.04 $1.91 $1.77
Source: CME

Current USDA Milk Price Forecasts
5-17-2011 2nd Q 2011 3rd Q 2011 4th Q 2011 1st Q 2012
Class III Price $16.60 to $16.90 $16.65 to $17.25 $16.05 to $16.95 $14.90 to $15.90
Class IV Price $19.85 to $20.25 $18.70 to $19.40 $17.05 to $18.05 $16.25 to $17.35
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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