Missouri Dairy Business Update

Volume 12, Number 5
May 2012

Milk Prices

According to Bob Cropp's Dairy Outlook, "The growth in milk production continues to put downward pressure on milk prices. USDA’s estimate of April milk production for the 23 reporting states was 3.3% higher than a year ago and for the U.S. 3.2% higher.

The May Class III price will be near $15.20 and the Class IV price near $13.70. Class III futures show a weak recovery staying below $16 for the reminder of the year. Class IV futures don’t reach $14 until September and stay below $15 for the remainder of the year. A much stronger recovery than this for the last half of the year is still possible, but will require a slowdown in milk production along with good domestic sales and exports. "

Futures on the Chicago Mercantile Exchange
5-29-12 May Jun July Aug Sept Oct Nov Dec Jan 13 Feb
Class III Milk
(per cwt.)
15.22 15.57 15.98 15.98 16.08 16.00 15.95 15.85 15.81 15.59
Class IV Milk
(per cwt.)
13.67 13.75 13.85 14.00 14.20 14.40 14.30 14.60 15.05 15.00
Butter
(per lb.)
1.36 1.42 1.45 1.47 1.49 1.48 1.49 1.50 1.52 1.50
Source: CME
Current USDA Milk Price Forecasts
5-16-2012 2nd Q 2012 3rd Q 2012 4th Q 2012 1st Q 2013
Class III Price $15.40 to $15.70 $15.85 to $16.45 $15.90 to $16.80 $15.05 to $16.05
Class IV Price $13.90 to $14.30 $13.90 to $14.60 $14.45 to $15.45 $14.65 to $15.75
Source: USDA, ERS, Livestock, Dairy & Poultry Outlook

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