Missouri Dairy Business Update

Volume 14, Number 10
October 2014

Milk Prices

According to Bob Cropp's October Dairy Outlook, "Higher U.S. milk production, slowing of dairy exports and higher dairy imports are pushing down milk prices. USDA’s estimated milk production for the month of September shows production 4.0% higher than a year ago. Milk cow numbers only increased 2,000 head from August and were 0.6% higher than a year ago. But, milk per cow was much higher at 3.4% above September a year ago."

"The Class III price which was $24.60 for September will be near $23.95 for October down to around $19.50 by December. For the year, the Class III price will average near $22.45, about $4.45 higher than the $17.99 average last year."

"There is unanimous agreement amongst price forecasters that milk prices will be lower in 2015. But, the opinions vary considerable as usual. Two big uncertainties are what will be the level of dairy exports and how much U.S. milk production will actually increase. As of now it looks like the Class III price could be about $18.25 by January and then falling into the $17s most of the year with the possibility of even being below $17 mid-summer before some strength in the fall."

Futures on the Chicago Mercantile Exchange
10-31-2014 Oct Nov Dec Jan Feb Mar Apr May June July

Class III Milk
($ per cwt.)

23.79 21.25 18.99 17.85 17.41 17.06 16.90 16.91 17.01 17.10

Class IV Milk
($ per cwt.)

21.43 17.46 16.98 16.85 16.42 16.32 16.25 16.44 16.46 17.05
Source: CME

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