Missouri Dairy Business Update

Volume 16, Number 6
June 2016

Milk Prices

According to Bob Cropp's June Dairy Outlook, "Both Class III and Class IV futures have responded to higher dairy product prices. Currently Class III futures jump to $15.05 for July and then in the $16's August through November with December in the high $15s. Class IV futures jump to $15.59 for July and then the $16's for the remainder of the year. The price of corn, soybean meal and alfalfa hay have all increased. So these higher prices are much needed to improve margins for dairy producers.

Whether these dairy product prices hold or improve even more and increasing dairy producer prices will depend a lot upon the level of milk production. Butter and cheese sales are expected to remain strong. USDA's report of May milk production shows a continuation of relatively strong milk production with May being up 1.2% from May a year ago. But, the report shows milk cows have stop increasing and have been at 9.327 million head for the past three months, and were just 3,000 head higher than a year ago. The increase in milk production is being driven by more milk per cow. Last year milk per cow increased well below trend at just 0.6%. Milk per cow for May was 1.2% higher than last year."

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CME Class III and Class IV Milk Futures
6-27-2016 June July Aug Sept Oct Nov Dec Jan Feb Mar

Class III Milk
($ per cwt.)

$13.22 $14.89 $15.86 $16.28 $16.27 $16.21 $15.99 $15.86 $15.90 $15.92

Class IV Milk
($ per cwt.)

$13.73 $15.43 $16.30 $16.40 $16.50 $16.62 $16.30 $16.30 $16.30 $16.21

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