Missouri Dairy Business Update

Volume 18, Number 4
April 2018

Milk Prices

According to Bob Cropp's April Dairy Outlook "Milk prices continue on the path of slow recovery. The prices of butter, cheese, dry whey and nonfat dry milk will average higher in April than March increasing the Class III and Class IV prices."

"Milk prices haven't been helped by the fact that milk production started the year well above a year ago. Both January and February production was 1.8% higher. This resulted in relatively high increases in the production of dairy products. Compared to February a year ago, production increases were: butter 4.7%, cheddar cheese 5.7%, total cheese 4.2%, nonfat dry milk 12.1% and dry whey 14.6%. This production increase has kept stocks relatively high holding down price increases."

"With more optimism for domestic sales and dairy exports how much milk prices improve for the remainder of the year depends a lot on the level of milk production. USDA revised down increases in milk production from 1.8% for both January and February to 1.7% and 1.6% respectively. Positive for continued improvement in milk prices is USDA's estimated March milk production to be up just 1.3%. Milk cow numbers declined by 2,000 head, the first decline since September of last year and were just 0.2% higher than a year ago. The slowdown in milk production came from a relatively small increase in milk per cow of just 1.1%.

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CME Class III and Class IV Milk Futures
4-25-2018 Apr May June July Aug Sept Oct Nov Dec Jan

Class III Milk
($ per cwt.)

14.53 15.02 15.50 15.96 16.27 16.49 16.49 16.37 16.30 15.94

Class IV Milk
($ per cwt.)

13.55 14.63 15.31 15.50 15.70 15.93 16.01 16.07 16.11 15.70

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