Missouri Dairy Business Update

Volume 15, Number 11
November 2015

Milk Prices

According to Bob Cropp's November Dairy Outlook, "Dairy product prices have held at levels during November meaning little change in milk prices from October."

"But, it looks like milk prices could weaken considerably as we end the year and for the first quarter of next year. Milk production is increasing seasonally and the holiday orders of butter and cheese for Thanksgiving and Christmas are about filled."

Dairy product prices on the Global Dairy Trade rallied some in October but have since fallen back to levels well below existing U.S. prices making U.S. products not price competitive for exports but more attractive for imports. September imports of cheese were 18% higher than a year ago and butter imports 90% higher. World stocks of dairy products, particularly milk powders are burdensome due to higher world milk production coupled with the loss of demand driven mainly by the two largest importers, China and Russia substantially cutting imports. U.S. exports are not likely to improve much until these world stocks are reduced and world prices increase which may not occur until sometime during the last half of 2016."

"The Class III price may stay in the low $14’s first quarter of next year and not reaching the $15’s until second quarter, but improve to the $16’s by summer and possibly even reaching the low $17’s by late fall."

Futures on the Chicago Mercantile Exchange
11-20-2015 Dec Jan Feb Mar Apr May June July Aug Sept

Class III Milk
($ per cwt.)

14.81 14.82 15.00 15.21 15.30 15.53 15.90 16.27 16.38 16.60

Class IV Milk
($ per cwt.)

15.44 13.92 13.99 14.40 14.80 15.01 15.48 15.97 16.31 16.43

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