Missouri Dairy Business Update

Volume 14, Number 1
January 2014

Milk Prices

According to Bob Cropp's January Dairy Outlook, "Milk prices are starting out in 2014 considerably higher than what was forecased earlier. All dairy product prices strengthened starting early January."

"Factors explaining the strength in dairy product prices include milk production, and 
favorable domestic  sales and strong exports, both of which tightened stocks."

"While milk production is forecasted to increase in each of the five major exporters, (EU-17 countries, New Zealand, U.S., Argentina and Australia) world demand is anticipated to stay strong with China leading the way with increased imports absorbing the increase in world supply of dairy products."

"The odds are that as we move through the year with the much improved margins for dairy producers milk cow numbers will increase and milk per cow will improve. So the probability is higher that milk prices could be lower than what Class III futures currently show in the months ahead rather than higher."

 

Futures on the Chicago Mercantile Exchange
1-29-2014 Jan Feb Mar Apr May June July Aug Sept Oct

Class III Milk
($ per cwt.)

21.06 22.91 20.96 19.80 19.15 18.88 18.70 18.47 18.35 18.09

Class IV Milk
($ per cwt.)

22.26 23.40 23.12 22.50 21.66 21.10 20.83 20.30 20.15 19.74
Source: CME

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