Missouri Dairy Business Update

Volume 13, Number 11
November 2013

Milk Prices

According to Bob Cropp's November Dairy Outlook, "Once holiday orders are filled butter and cheese prices will likely decline lowering the Class III price. The December Class III price could fall in the $17.80 to $17.90 range. But, higher nonfat dry milk prices could keep the December Class IV price near $20.60. Dairy product prices are likely to decline further going into January and the first quarter of 2014. How far prices will decline will hinge on the level of milk production and dairy exports. While milk prices will decline the lower feed costs could maintain margins favorable for increasing milk production. The question is whether the increase in milk production will pick up with cow numbers increasing again and better milk per cow. Dairy exports are not expected to decline much in 2014. But, with a likely increase in milk production the Class III price could fall below $17.00 during the first quarter of 2014 and average in the low $17s for the first half of the year. The continued export level of nonfat dry milk could keep the Class IV price in the high $19s first quarter and above $18.00 for the reminder of the year. Current Class III dairy futures are not as optimistic settling in the high $16s first half of the year and in the low $17s for the second half. Class IV dairy futures are settling in the high $19s first quarter and above $18.00 for the remainder of the year.

Futures on the Chicago Mercantile Exchange
11-22-2013 Nov Dec Jan Feb Mar Apr May June July Aug

Class III Milk
($ per cwt.)

18.79 18.08 17.32 16.95 16.77 16.73 16.70 16.85 17.09 17.15

Class IV Milk
($ per cwt.)

20.62 20.99 20.49 20.09 19.50 18.90 18.50 18.49 18.03 18.04
Source: CME

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