Missouri Dairy Business UpdateCommercial Agriculture
Volume 1, Number 2

October 2001

Milk prices in Southern and Northern Missouri move closer

Mailbox milk check prices for producers in Northern and Southern Missouri have been closer the last three months than at any time since federal order reform took effect January 1, 2000. The reason: higher class III prices.

When Class III milk prices are higher than Class IV prices, as they have been the last three months, the low class I utilization of the Central Milk Marketing Order does not lower producers' milk checks nearly as much as it does when Class III milk prices are near support levels.

Graph 1

Milk Prices in Missouri

Southeast and Central Order Farm Level Prices in Missouri
Month/YearClass III PriceSoutheast Order in Missouri:Central Order in Missouri:Our Farm's Milk Price
Jackson County, Missouri Statistical Uniform Price
Jan-00 $10.05$12.26$11.23

Graph 2

Graph 3

To learn more about milk marketing in Missouri, check your Milk Marketing Administrator's web page: Southeast Milk Marketing Order or Central Milk Marketing Order.

Whole Cottonseed Update

The cotton harvest in Missouri is well underway. According to Ag Statistics, the cotton harvest is 17% complete as of the last week in September. In the far south of the bootheel, around Kennett, "Most of the gins are at capacity and we have modules waiting to be ginned," according to Mike Milam, extension cotton agronomist. Further north around Sikeston, the first cotton is just now starting to be picked.

For dairymen wanting to lay in a supply of whole cottonseed, the heat of the ginning season is normally a good time to purchase supplies. Many smaller gins may have cottonseed to sell during ginning season, but do not store cottonseed for sale later in the year. Many small gins are not set up to store cottonseed, nor do they want the insurance liability of holding cottonseed. Some small gins may sell discounted spot loads to dairymen who come to get it, but their main business is cotton and they prefer to sell the whole cottonseed to a commodity storage company or to an oilmill as soon as the seed starts piling up.

For current prices and suppliers of cottonseed, check out the Byproduct Price List on AgEBB. Also, you can get a list of other prices and suppliers from the whole cottonseed link at the Cotton Incorporated website.

Intensive rotational grazing continues to grow in Missouri

Intensive rotational grazing continues to attract interest in Missouri. The Southwest Missouri Family Dairy Farm Project website has a lot of information about the dairymen who are converting to intensive rotational grazing and the results they are having. An summary of the economics of the dairymen involved is available on AgEbb under The Economics of Pasture Based Dairy Production.

Milk Price Outlook

The USDA's regular monthly Livestock, Dairy and Poultry Situation and Outlook report which came out September 26th, after the World Trade Center Bombing had these encouraging words about dairy prices for the next year:

"Class III (milk for cheese) prices are expected to run close to Class IV (milk for butter and dry milks) prices this autumn, after being higher during the summer. This relative parity contrasts sharply with the large advantage held by Class IV prices during 2000 and early 2001. Adjustment of the support purchase prices played an important role in this realignment, as did lower cheese production.

Milk prices are projected to decline an average of about $2 per cwt in 2002 under the twin pressures of large increases in milk production and slowing growth in dairy product demand. Even so, prices are expected to stay well above the average of 2000, when farm milk prices dropped to the 1980-95 trend.

Prepared by Joe Horner,  Dairy and Beef Economist, Commercial Agriculture Program, University of Missouri. To contact Joe, call 573-882-9339, or e-mail hornerj@missouri.edu. All copies of this publication are accessible through AgEBB.

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