Missouri Dairy Business Update

Volume 12, Number 12
December 2012

Milk Prices

According to Bob Cropp's Dairy Outlook, "Milk price are headed lower for December and perhaps for January of next year driven by lower dairy product prices, particularly for cheese and butter."

"As we look into 2013, we could see some further weakening of milk prices. The January Class III price could be near $18.00 with little change for the Class IV price. But, we can expect some price recovery by February as cheese demand is usually relatively strong for the month and cheese and butter buyers may need to refill their stocks. Class III futures still remain rather flat from February on trading in the 18.35 to $18.75 range. But, there is still the potential for higher prices by summer and fall. It depends heavily upon the level of milk production. And the level of milk production will hinge heavily upon 2013 crop conditions and resulting feed prices."

Futures on the Chicago Mercantile Exchange
12-24-12 Dec Jan 13 Feb Mar Apr May June July Aug Sep

Class III Milk
(per cwt.)

$18.57 $18.37 $18.45 $18.44 $18.48 $18.51 $18.61 $18.60 $18.75 $18.66

Class IV Milk
(per cwt.)

$18.00 $18.23 $18.25 $18.31 $18.33 $18.30 $18.34 $18.25 $18.25 $18.10
Source: CME
Current USDA Milk Price Forecasts
December 17, 2012 4th Q 2012 1st Q 2013

2nd Q 2013

2013
Class III Price $20.05-$20.25 $17.95-$18.45 $18.20-$19.00 $18.00-$18.80
Class IV Price $18.25-$18.55 $17.45-$18.05 $17.15-$18.05 $17.00-$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