Missouri Dairy Business Update

Volume 15, Number 8
August 2015

Milk Prices

According to Bob Cropp's August Dairy Outlook, "Milk prices will hold for another month and in fact prices may be a little higher than July. The July Class III price was $16.33 and may be near $16.40 for August."

"The question is how long will cheese and butter prices hold at these levels? Three factors will support prices. One is declining milk production and milk composition seasonally during the hot summer months. Second, buyers of butter and cheese will be placing orders and building inventory for the strong holiday season. Third, schools will be opening which increases fluid (beverage) milk sales. But, dairy
product production has been higher than a year ago and stocks are building."

"Dairy exports will not offer much support for higher dairy product prices or milk prices until perhaps the second half of 2016. June exports declined for the 4th straight month. On a total solids basis exports were equivalent to 14.6% of total milk production compared to 15.4% last year."

"If milk production continues to increase by more than 1.0%, which is expected, dairy product prices and milk prices will likely show some weakness, especially once butter and cheese buyers fill their orders for the holiday season. Prices could hold for another month or two before showing some softness."

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Futures on the Chicago Mercantile Exchange
8-28-2015 Sept Oct Nov Dec Jan Feb Mar Apr May June

Class III Milk
($ per cwt.)

16.17 16.40 16.17 15.92 15.54 15.45 15.45 15.57 15.90 16.29

Class IV Milk
($ per cwt.)

14.68 15.04 14.95 14.00 14.05 14.35 14.78 15.08 15.33 15.34

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