Missouri Dairy Business Update

Volume 12, Number 11
November 2012

Milk Prices

According to Bob Cropp's Dairy Outlook, "Milk prices may have peaked for the year in October. The October Class III price was $21.02 and it now looks like the November Class III price will be about $20.80 and falling lower in December. The Class IV
price however was $18.54 in October and will about $18.70 for November and may hold near this level for December."

"If the trend in milk production continues this will support stronger milk prices than what are currently indicated by Class III futures. USDA’s release of US milk production shows production dropping below a year ago for two consecutive months with September down 0.6% but October down just 0.1%. Cow numbers started to decline in May and were down 84,000 head as of October which put the number
0.3% below a year ago."

Futures on the Chicago Mercantile Exchange
11-28-12 Nov Dec Jan 13 Feb Mar Apr May June July Aug

Class III Milk
(per cwt.)

$20.77 $19.15 $18.85 $18.68 $18.72 $18.70 $18.65 $18.55 $18.60 $18.60

Class IV Milk
(per cwt.)

$18.56 $18.35 $18.55 $18.60 $18.50 $18.40 $18.35 $18.35 $18.35 $18.35
Source: CME
Current USDA Milk Price Forecasts
November 2012 4th Q 2012 1st Q 2013

2nd Q 2013

2013
Class III Price $20.65-$20.95 $19.25-$19.85 $18.00-$18.90 $17.85-$18.75
Class IV Price $18.40-$18.80 $17.65-$18.35 $16.85-$17.85 $16.90-$17.90
Source: USDA, ERS, Livestock, Dairy & Poultry Outlook

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