Missouri Dairy Business Update

Volume 15, Number 10
October 2015

Milk Prices

According to Bob Cropp's October Dairy Outlook, "Milk prices for October will decline just slightly. The Class III price was $15.82 in September and will be near $15.60 for October, the result of little lower cheese and dry whey prices. But, the October Class IV price will be higher near $16.40 compared to $15.08 in September the result of butter prices holding up and higher nonfat dry milk prices. Sales of butter and cheese remain good holding up prices, but exports continue to decline."

"With the filling of holiday orders we can expect both butter and cheese prices to fall lower bring down both the Class III and Class IV price. The Class III price could be about $15.45 by December and the Class IV price about $14.50. And we could expect further price declines first half of 2016. How low prices may end up will depend heavily upon the level of milk production and domestic sales because much
improvement in exports is not likely until the last half of 2016."

While Class III and Class IV futures also show declines for the first half of 2016 they remain higher than this. If milk production continues to increase at less than 1% going into 2016, then milk prices will be higher. So much uncertainty exists as to where final prices end up. Milk prices can swing quickly in either direction with rather small changes in the level of milk production and the combination of domestic sales and exports."

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Futures on the Chicago Mercantile Exchange
10-28-2015 Nov Dec Jan Feb Mar Apr May June July Aug

Class III Milk
($ per cwt.)

15.50 15.48 15.49 15.62 15.83 16.01 16.20 16.50 16.78 16.92

Class IV Milk
($ per cwt.)

15.63 14.57 14.58 15.06 15.54 15.73 15.95 16.15 16.46 16.61

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