Missouri Dairy Business Update

Volume 17, Number 5
May 2017

Milk Prices

According to Bob Cropp's May Dairy Outlook, "April may have been the bottom for milk prices. The Class III price fell from $16.77 in January to $15.22 in April and May should be near $15.60."

"Milk prices should continue to improve from here out. Domestic sales appear to be favorable for butter and cheese. Dairy exports are expected to continue above year ago levels. As world supply and demand tightens world dairy product prices will increase making U.S. dairy product prices more competitive. Milk production among major dairy exporters has been below year ago levels for the EU-28, New Zealand, Australia and Argentina. U.S. has been the exception with higher milk production."

"Class III futures have turned more optimistic about milk prices than at the beginning of May. Class III futures reach the low $16’s by June and the low $17’s August through November. With continued good domestic sales and improved dairy exports a Class III price in the higher $17’s by October is very possible. Some price forecasters even see $18 as a possibility. Weather will also be a factor as to where milk prices end up. Hot and humid summer weather can reduce the increase in milk production and depress milk components lowering the yield of dairy products per 100 pounds of milk. Milk prices will respond to relatively small changes in milk production, domestic sales and dairy exports. But, milk prices could average for the year $1.30 to more than $2 higher than last year."

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CME Class III and Class IV Milk Futures
5-26-2017 May June July Aug Sept Oct Nov Dec Jan Feb

Class III Milk
($ per cwt.)

15.61 16.51 17.04 17.40 17.44 17.24 17.08 16.86 16.71 16.65

Class IV Milk
($ per cwt.)

14.55 15.93 16.43 16.68 16.88 16.97 16.88 16.94 16.55 16.55

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