Missouri Dairy Business Update

Volume 14, Number 8
August 2014

Milk Prices

According to Bob Cropp's August Dairy Outlook, "Milk production is picking up as dairy producers feed for higher production per cow and by adding milk cows. USDA’s milk production report revised June’s milk production to 2.2% higher than a year ago and estimated July’s production 3.9% higher. July milk cows numbered 0.4% higher than a year ago and milk per cow was 3.5% higher. Cow numbers increased by reduced culling and adding dairy replacements. Dairy cow slaughter this year is 10.3% lower than a year ago. Of the 23 reporting states, 11 had more cows than a year ago, 21 had more milk per cow and 20 had more total milk production."

"We can expect dairy product prices and milk prices to decline. The question is how soon and by how much."

"We can expect milk production to continue to run 4% or more higher than a year ago for the remainder of the year and end the year around 2.4% higher than 2013. Milk production for January through July was 1.6% higher than a year ago. But, it will take time to build stock levels so prices could gradually decline rather than take a sharp fall."

Futures on the Chicago Mercantile Exchange
8-28-2014 Aug Sept Oct Nov Dec Jan Feb Mar Apr May

Class III Milk
($ per cwt.)

22.24

23.95

22.78 20.87 19.74 18.60 18.21 18.07 18.00 18.00

Class IV Milk
($ per cwt.)

23.83 23.00 21.77 20.00 18.52 18.00 17.84 17.83 17.73 17.47
Source: CME

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