Missouri Dairy Business Update

Volume 13, Number 1
January 2013

Milk Prices

According to Bob Cropp's Dairy Outlook, "We enter 2013 with weaker dairy product prices and as a result, lower milk prices.

Softer cheese prices may be explained by sales, exports and stocks. Wholesale and retail cheese buyers are waiting to see where prices bottom out before major new purchases. Butter prices are not likely to increase much until later in the year."

"Class III prices even approaching $19 by late summer and fall is still possible. Class IV prices may also be near $18.00 by March and perhaps reaching $18.55 by summer or fall. These prices can all change rather quickly with any major differences in any of the following factors –milk production, domestic sales or exports from what we now think will happen. But, for these higher prices the pattern of milk production needs to change from the increases experienced during November and December. But, as of now it still looks like 2013 prices could end up averaging more than $1.00 higher than each of the 2012 averages of $17.44 for Class III, $16.01 for Class IV and $18.52 for the U.S. average all milk price."

Futures on the Chicago Mercantile Exchange
1-29-13 Jan 13 Feb. Mar Apr May June July Aug Sep Oct

Class III Milk
($ per cwt.)

18.10 16.94 16.64 16.89 17.44 17.93 18.20 18.39 18.47 18.36

Class IV Milk
($ per cwt.)

17.50 17.60 17.89 18.12 18.38 18.45 18.42 18.50 18.55 18.55
Source: CME
Current USDA Milk Price Forecasts
January 17, 2013 1st Q 2012 2nd Q 2013

3rd Q 2013

4th Q 2013
Class III Price 17.90 - 18.30 17.70 - 18.40 17.60 - 18.60 17.45 - 18.45
Class IV Price 17.05 - 17.55 17.10 - 17.90 16.85 - 17.95 16.90 - 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