Missouri Dairy Business UpdateCommercial Agriculture
Volume 2, Number 9

September 2002

Fall Milk Prices

According to USDA's September 26, 2002, Dairy Outlook, http://www.ers.usda.gov/publications/so/view.asp?f=livestock/ldp-mbb/

"Wholesale dairy prices may post some seasonal increases in coming months, but such rises are expected to be quite moderate.

Butter stocks will remain a major price factor, and these holdings are not likely to be worked off quickly or easily. Prices are projected to stay lackluster well into 2003. If production slows while demand recovers during the year, some price recovery is likely. However, only modest price rebounds currently seem most likely.

Farm milk prices in 2002 are projected to fall an average of almost $3 per cwt from 2001's strong showing. This would be the largest proportional single-year drop in a half century. Farmers are expected to receive only slightly higher prices in 2003."

For a look back at milk prices over the last seven years, take a look at this graph: http://www.usda.gov/nass/aggraphs/pricemk.htm

The future's market is showing some seasonal strength.

Milk Futures on the Chicago Mercantile Exchange

September 26, 2002
 OctoberNovemberDecemberJanuary 03February 03March 03
Class III10.5210.4610.4310.5710.8011.30
Class IV10.4510.5010.5510.5510.7010.95

Source: Merc website: http://www.cme.com/prices/index.cfm

For historical price trends between futures & Missouri milk prices check: http://agebbfp.missouri.edu/commag/beefanddairy/Basis.htm

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