Missouri Dairy Business Update  
Volume 11, Number 7
July 2011

Milk Prices

According to Bob Cropp's Dairy Outlook, "the July Class III price will be above $21.00 compared to just $13.74 last year. The July Class IV price will be near $20.65 compared to $15.75 a year ago. These could be the high prices for the year, but may be not. The fairly wide spread summer heat now being experience is likely to effect milk production, especially if it continues for several days. So August prices may actually hold near these levels. Class III dairy futures have strengthened with prices not falling below $20 until October and below $18 until December. Class IV futures don’t fall below $19 until October. We could end the year
with Class III averaging near $18 compared to $14.41 last year and Class IV averaging near $19 compared to $15.09 last year. This is more optimistic outlook than last month. But, history clearly tells us the prices can change rather quickly with new market developments. How this year’s crops turn out and their impact on feed prices will be a key factor affecting cow numbers, milk per cow and total milk production this fall and winter."

Futures on the Chicago Mercantile Exchange
7-27-2011 July Aug Sept Oct Nov Dec Jan 12 Feb Mar Apr
Class III Milk (per cwt.) $21.34 $21.34 $20.55 $19.49 $18.52 $17.61 $17.20 $16.81 $16.81 $16.71
Class IV Milk (per cwt.) $20.51 $20.00 $19.24 $18.89 $18.51 $18.29 $17.75 $17.45 $17.40 $16.25
Butter (per lb.) $2.04 $2.06 $2.07 $2.07 $2.01 $1.92 $1.86 $1.84 $1.84 $1.80
Source: CME

Current USDA Milk Price Forecasts
7-18-2011 2nd Q 2011 3rd Q 2011 4th Q 2011 1st Q 2012
Class III Price $17.50 $20.00 to $20.40 $17.95 to $18.65 $15.90 to $16.90
Class IV Price $20.37 $20.05 to $20.55 $18.15 to $18.95 $16.70 to $17.80
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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