Missouri Dairy Business Update

Volume 16, Number 5
May 2016

Milk Prices

According to Bob Cropp's May Dairy Outlook, "Declining cheese prices will result in a Class III price not seen since September and October 2009. On the CME 40-pound block cheddar cheese averaged $1.42 per pound in April, but has ranged from $1.36 per pound to $1.27 in May, the lowest since July and August of 2009."

"Despite increased production and building stocks butter remains above $2.00 per pound. And with a little increase in the nonfat dry milk price, which averaged $0.74 per pound in April has been in the $0.78 to $0.82 per pound range in May, the May Class IV price will increase. The May Class IV price will be near $13.25 compared to $12.68 in April, $16.19 last year and $23.13 in 2014."

"Domestic commercial disappearance of both butter and cheese remain good. Compared to March of last year butter was 10.7% higher, American cheese, however was 3.1% lower, but other cheese varieties were 8.8% higher making total cheese disappearance 3.9% higher. But, exports remain soft."

"On a total solids basis March exports were equivalent to 12.1% of milk production, the lowest in 14 months. But, imports of dairy products were higher and equivalent to 3.9% of milk production."

"Unless milk production slows and/or exports improve milk prices will show a very slow recovery in the months ahead."

"The U.S. average All Milk price is forecasted to average between $14.60 and $15.10 for the year compared to the average of $17.11 last year. Current Class III futures stay below $14.00 until August and peak below $15 in December. Class IV futures are a little more optimistic reaching the $14s by August and the $15s October through December."

Listen to Podcast

CME Class III and Class IV Milk Futures
5-27-2016 May June July Aug Sept Oct Nov Dec Jan Feb

Class III Milk
($ per cwt.)

$12.80 $12.85 $13.15 $13.85 $14.56 $14.85 $14.96 $15.03 $15.10 $15.19

Class IV Milk
($ per cwt.)

$13.24 $13.75 $14.24 $14.60 $15.03 $15.17 $15.37 $15.19 $14.64 $14.57

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