Missouri Dairy Business Update

Volume 16, Number 10
October 2016

Milk Prices

According to Bob Cropp's October Dairy Outlook, "Milk production continues to run above year ago levels. USDA shows U.S. milk production for the month of September up 2.1% from a year ago. The number of milk cows was just 0.2% higher than a year ago, but the increase in milk per cow was 1.8% higher."

"USDA and other price forecasters have milk prices improving as we move through 2017, but with differences as to how quickly and how much of an improvement. The level of milk production and exports will be key factors."

"World milk supply and demand is slowly coming into balance."

"As of now it looks like the Class III price will be in the $15's at least for the first quarter of 2017 with continue increases there after reaching the $16's by perhaps the end of the second quarter and the high $16's possible by the end of the third quarter and the 4th quarter. However, my forecast is higher than USDA's and current Class III futures. Prices are very sensitive to rather small changes so no doubt forecasts will be revised."

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CME Class III and Class IV Milk Futures
10-31-2016 Oct Nov Dec Jan Feb Mar Apr May June July

Class III Milk
($ per cwt.)

14.78 16.06 15.88 15.78 15.91 16.08 16.10 16.15 16.30 16.45

Class IV Milk
($ per cwt.)

13.68 13.80 14.06 14.49 14.95 15.40 15.77 16.03 16.30 16.60

Historical Missouri milk prices including comparison to the USDA National All Milk Price used for MPP may be found at:http://dairy.missouri.edu/mkt/index.htm