Missouri Dairy Business Update

Volume 13, Number 2
February 2013

Milk Prices

According to Bob Cropp's Dairy Outlook, "Milk prices will be lower for the month of February before starting back up. The Class III price was $18.14 for January and will be near $17.25 for February. The Class IV price was $17.62 in January and will be near $17.50 for February. These lower prices are driven by lower commodity prices. Commodity prices often soften after the first of the year before increasing seasonally towards Easter.

Milk prices could still start to improve beginning with March. With slow improvement in the economy sales continue to show growth. The world supply and demand situation is forecasted to remain relatively tight through at least summer giving opportunity for favorable U.S. exports. So exports ought to be a positive factor going forward for higher milk prices. And prices normally improve as we approach Easter. Milk production normally peaks around May or June giving rise to higher milk prices summer and fall. Dairy cow slaughter continues to run well above a year ago which should reduce cow numbers for at least the first half of the year. But, up to now despite heavier cow slaughter there exist and inventory of dairy replacements to increase cow numbers. Yet, cow numbers are expected to decrease for the first six months before perhaps starting to increase again during the last half of the year."

Futures on the Chicago Mercantile Exchange
2-26-13 Feb. Mar Apr May June July Aug Sep Oct Nov

Class III Milk
($ per cwt.)

17.22 17.09 17.00 17.26 17.63 18.03 18.32 18.40 18.25 18.00

Class IV Milk
($ per cwt.)

17.57 17.65 17.70 17.80 17.91 18.25 18.40 18.35 18.49 18.42
Source: CME
Current USDA Milk Price Forecasts
2-14-13 1st Q 2013 2nd Q 2013

3rd Q 2013

4th Q 2013
Class III Price 17.30 - 17.60 17.80 - 18.40 18.05 - 18.95 17.45 - 18.45
Class IV Price 17.35 - 17.75 17.20 - 17.90 16.85 - 17.85 16.60 - 17.70
Source: USDA, ERS, Livestock, Dairy & Poultry Outlook

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