Missouri Dairy Business Update

Volume 17, Number 7
July 2017

Milk Prices

According to Bob Cropp's July Dairy Outlook, "Milk prices have been running higher than a year ago. For the January through June period Class III averaged $16.17 compared to $13.48 a year ago. The Class IV price averaged $15.08 compared to $13.18 a year ago. The Class III price had fallen from $16.77 for January to $15.22 for April, but increased to $16.44 in June."

"After July both the Class III and Class IV price should start to increase again driven by a slower growth in milk production and continued improvement in exports. Extreme heat in the West has negatively impacted milk production in California. Very wet conditions in the Northeast and Midwest has made the harvesting of hay difficult lowering its quality. Lower forage quality may dampen the increase in milk per cow this fall and winter. If the increase in milk production stays below 2% and exports continue to improve milk prices will strengthen."

"If milk continues to increase less than 2% and exports continue to improve, the Class III price could be back to near $16.50 by August and reaching the low $17’s for October and November with an average for the year $16.45 to $16.75 compared to $14.87 in 2016. The August Class IV price could be near $16.60 and in the $17’s September through November and averaging $15.90 to $16.10 for the year compared to $13.75 in 2016. But, any changes in milk production or exports could push these prices either higher or lower."

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CME Class III and Class IV Milk Futures
7-27-2017 July Aug Sept Oct Nov Dec Jan Feb Mar Apr

Class III Milk
($ per cwt.)

15.49 16.45 16.91 17.10 17.15 16.89 16.66 16.64 16.60 16.55

Class IV Milk
($ per cwt.)

16.64 16.71 16.87 17.09 17.10 16.55 16.07 16.14 16.23 16.35

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