Missouri Dairy Business Update
Volume 17, Number 9
According to Bob Cropp's September Dairy Outlook, "Forecasted milk prices for the remainder of the year have softened from what was expected earlier. The Class III price was $16.44 in June, fell to $15.45 in July, but increased to $16.57 in August and was expected to continue to strengthen reaching into the low $17’s by October. But, now the September Class III price will weaken some to around $16.25. And it will take a rally in cheese prices to strengthen the Class III price October through December."
"Dairy exports have added strength to milk prices. But, after 12 straight months of year-over-year growth, dairy export volume declined in July. Exports of nonfat dry milk/skim milk powder declined 13%, the first decline since June 2016. Nonfat dry milk/skim milk powder exports are facing competition from the EU. Both whey products and lactose exports were unchanged from a year ago. However, exports of butterfat and cheese were 66% and 14% higher respectively. On a total solids basis exports were equivalent to 13.4% of U.S. milk production compared to 14.5% last year and the lowest since January."
"Looking into 2018 the Class III price could be in the $15’s first quarter before moving into the $16’s. Current Class III futures don’t reach the $16’s until July. With expected improvement in milk production in the EU and New Zealand U.S could face stiff competition for nonfat dry milk/skim milk powder exports. The result could be a Class IV price in the $15 the first half of the year with stronger butter prices pushing it into the low $16’s for the second half. Current Class IV futures also reflect this price pattern."
Listen to Podcast
|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