Missouri Dairy Business Update
According to the Bob Cropp's August Dairy Outlook, "It now appears that milk prices will not peak as high this summer and fall as earlier predicted. Milk production in relation to domestic demand and exports is keeping milk prices lower."
"With higher milk production than a year ago dairy product production was also higher. Compared to last year June production of butter was 2.7% higher, American cheese 1.2% higher and total cheese 1.4% higher. June 30th stocks were also considerably higher than a year ago. Butter stocks were burdensome being 33.2% higher. American cheese stocks were 6.4% higher and total cheese stocks 4.9% higher."
"While current Class III futures show declining Class III prices from August on falling below $18 by September and ending in December below $17, there is still a chance that prices could do better than this. Milk production is declining seasonally, increases in milk production above a year ago are likely to be less than 2%, schools are opening which increases fluid milk consumption, and cheese and butter buyers need to start to build inventories to meet the strong seasonal sales period of thanksgiving through Christmas. In addition, dairy exports are forecasted to remain strong through at least the end of the year. All of these factors ought to strengthen cheese prices in the weeks ahead. While my earlier prediction for the Class III price to reach $19 this fall now seems unlikely, a Class III price in the high $18’s by October could still be possible."
|Futures on the Chicago Mercantile Exchange|
Class III Milk
Class IV Milk
|Current USDA Milk Price Forecasts|
|August 2013||3rd Q 2013||
4th Q 2013
|1st Q 2013||2014|
|Class III Price||17.75-18.05||17.95-18.55||16.35-17.25||16.55-17.55|
|Class IV Price||18.75-19.15||18.05-18.75||17.00-18.00||17.65-18.75|
|Source: USDA, ERS, Livestock, Dairy & Poultry Outlook|
Historical Missouri milk prices may be found at: http://agebb.missouri.edu/dairy/mkt/index.htm