Missouri Dairy Business Update
According to Bob Cropp's August Dairy Outlook, "Milk prices continue to show strong recovery from the lows in April and May. The August Class III price will be near $17, about $1.75 higher than $15.24 in July and about $4.25 higher than $12.76 in May. Higher Class III prices are driven by much higher cheese prices and some improvement in dry whey prices. Cheese prices are the highest since November of 2014."
"Exports may start to show some improvement. Milk production in the EU 28 countries which was running more than 5% higher earlier is now just 1%. Milk production is also projected to be lower in Australia, New Zealand and Argentina. China has been a little more active in imports. But, there is still excess world stocks to work off."
"Class III futures are near $17 for August and remain in the $17s through November before dropping to the $16s in December and continuing in the $16s for 2017. These prices appear to be a little optimistic. Once buyers are comfortable with their cheese and butter inventories to support the strong selling period of Thanksgiving through Christmas we could see lower cheese prices pushing the Class III price once again back to the $15s by November and December. It will take continued strong cheese sales and slower growth in milk production to support the current Class III futures."
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|CME Class III and Class IV Milk Futures|
Class III Milk
Class IV Milk
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