Missouri Dairy Business Update

Volume 13, Number 3
March 2013

Milk Prices

According to Bob Cropp's Dairy Outlook, "Despite widespread drought last year and high feed prices milk production continues to run above year ago levels, but up just slightly. USDA’s release of February’s milk production when adjusted for leap year showed production compared to a year earlier up just 0.1% for the 23 reporting states and estimated to be even for the U.S."

"With milk production running above a year ago dairy product production is also higher. January production compared to a year ago shows butter up 2.6%, cheddar cheese up 2.9% and total cheese up 2.4%. Exports have been lighter and domestic buyers have not been aggressive resulting in increased stocks. January 31st stocks compared to a year ago shows butter up 21.3% (increased 35% since the end of December), American cheese up just 0.2% and total cheese up 1.2%. Stocks of nonfat dry milk were up 57.2% and dry whey stocks up 17.5%."

"I still feel the probability of Class III reaching and holding at $19 plus by summer and fall as current futures show is quite high. But, as mentioned before the crop conditions and resulting feed prices this summer and fall will be critical to milk production and final milk prices the last half of the year."

Futures on the Chicago Mercantile Exchange
3-25-13 Mar Apr May June July Aug Sep Oct Nov Dec

Class III Milk
($ per cwt.)

17.01 17.36 18.12 18.69 19.00 19.10 19.01 18.77 18.55 18.20

Class IV Milk
($ per cwt.)

17.80 18.56 18.68 19.02 18.90 19.20 19.20 18.89 18.90 18.75
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 17.25 - 17.45 17.50 - 18.00 17.90 - 18.70 17.60 - 18.60
Class IV Price 17.55 - 17.85 17.35 - 17.95 17.50 - 18.40 17.00 - 18.10
Source: USDA, ERS, Livestock, Dairy & Poultry Outlook

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