Missouri Dairy Business Update

Volume 13, Number 5
May 2013

Milk Prices

According to the Cropp's Dairy Outlook, "Cheese stocks have been building. March 31st stocks of American cheese grew by 3% from February and were 4% higher than a year ago. March 31st total cheese stocks also grew 3% from February and were 5% higher than a year ago. March 31st butter stocks grew by 34% from February and were 22% higher than a year ago."

"Exports of cheese, butter, whey protein concentrates and lactose were well above year ago levels for January through March period giving strength to prices. World milk supply for exports of products has been rather tight due high feed prices and/or unfavorable weather in New Zealand, Australia, the EU‐27 countries and Argentina. However, rains have returned to New Zealand giving optimism to better pastures and improved milk production at the start of their next seasonal production later this summer and early fall. Feed prices are also expected to be lower giving rise to milk production in coming months in the EU‐27 countries. Currently world prices for
butter, nonfat dry milk/skim milk powder and cheese are all well above U.S. prices making U.S. products competitive on the world market."

"This year we can expect production to run a good one percent higher for the last half of the year putting the increase for the entire year a little more than 1%. Thus, the Class III price should not fall below $18 until the first quarter of 2014."

Futures on the Chicago Mercantile Exchange
5-22-2013 May June July Aug Sep Oct Nov Dec Jan Feb

Class III Milk
($ per cwt.)

18.50 18.10 18.39 18.69 18.97 18.85 18.47 17.98 17.50 17.25

Class IV Milk
($ per cwt.)

18.84 19.25 19.43 19.50 19.43 19.25 19.11 18.68 18.00 17.60
Source: CME
Current USDA Milk Price Forecasts
5-16-2013 2nd Q 2013

3rd Q 2013

4th Q 2013 2013
Class III Price 17.80 - 18.10 18.10 - 18.70 17.95 - 18.85 17.80 - 18.30
Class IV Price 18.40 - 18.80 18.55 - 19.35 18.20 - 19.20 18.20 - 18.80
Source: USDA, ERS, Livestock, Dairy & Poultry Outlook

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