Missouri Dairy Business Update

Volume 14, Number 12
December, 2014

Milk Prices

According to Bob Cropp's December Dairy Outlook, "Milk prices for 2015 have been lowered from earlier forecasts. Milk prices are forecasted lower for two reasons—lower dairy exports and a higher level of milk production."

"The strengthening of the U.S. dollar is also impacting exports. U.S. dairy exports were setting new records accounting for 17.7% of U.S. milk production back in March. But, with falling world prices exports started to slow. Butter exports through April were more than double the year before, but by May they fell below year ago levels. Nonfat dry milk exports fell below year ago levels by August and cheese by October. October exports compared to a year ago were down 82% for butter, 3% for cheese, 25% for nonfat dry milk and 9% for dry whey. October exports had fallen to 14.4% of U.S. milk production."

"The December Class III price will be near $17.75 compared to the peak of $24.60 back in September and $21.94 in November. But, as we move into 2015 increased milk production and lower exports means milk prices will fall further. By January the Class III price could be down to about $16.30 and falling to the $15’s February through August before showing some strength and peaking in the high 16’s in October or November. Some forecasters have the Class III price falling below $15 this spring which is not without a possibility."

 

Futures on the Chicago Mercantile Exchange
12-29-2014 Dec Jan Feb Mar Apr May June July Aug Sept

Class III Milk
($ per cwt.)

17.74 15.75 15.40 15.14 15.02 15.12 15.54 16.03 16.22 16.53

Class IV Milk
($ per cwt.)

16.58 14.51 14.40 14.20 14.40 14.62 14.83 15.40 15.77 16.00

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