Missouri Dairy Business Update

Volume 17, Number 4
April 2017

Milk Prices

According to Bob Cropp's April Dairy Outlook, "Milk prices have been trending downward since last December and will likely continue through May. The Class III price was $17.40 last December, fell to $16.77 in January and was $15.81 in March. April should be around $15.15 and May at $15 or a little below $15. Prices should start to trend upward again by June. This pricing pattern is not unusual. After strong seasonal sales of butter and cheese during Thanksgiving through Christmas sales soften, and at the same time milk production starts to increase seasonally. Then as we move into summer milk production slows, by September schools open increasing beverage milk sales and by fall milk plants and buyers of cheese and butter start building stocks to again meet the strong seasonal sales."

"The Class III price could be back to about $15.35 by June, in the $16’s by July with the $17’s possible by September giving an average for the year around $16.35 compared to $14.87 last year. Some price forecasters have a possible Class III of $18 by August. However, Class III futures do not reach the $16’s until August and stay below $17 for the remainder of the year giving an average for the year of about $16.10. USDA forecasts Class III to average between $16.10 and $16.60. No doubt as we move through the year and observe the actual level of milk production, dairy product sales and exports price forecasts will be revised, and that could be higher or lower than now forecasted. It doesn’t take big changes to result in changes in milk prices."

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CME Class III and Class IV Milk Futures
4-28-2017 Apr May June July Aug Sept Oct Nov Dec Jan

Class III Milk
($ per cwt.)

15.17 15.35 15.47 15.99 16.43 16.65 16.65 16.64 16.54 16.54

Class IV Milk
($ per cwt.)

13.95 14.38 14.55 14.81 14.94 15.13 15.31 15.41 15.34 15.31

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