|Missouri Dairy Business Update|
|Volume 3, Number 2|
More milk! Until traders start to see less milk, prices probably won't improve. For milk production to drop, someone has to cull more cows. So far, that hasn't happened.
Historical Missouri milk prices may be found at: http://agebb.missouri.edu/modbu/milkprices.htm To understand how Class III and Class IV prices relate to your local announced prices, check out the dairy basis website at: http://agebbfp.missouri.edu/commag/beefanddairy/basis.htm
Since last month, the USDA has lowered their Class III price forecast about $.30 per cwt for the second and third quarters of 2003. However, the MERC futures have dropped significantly this month. After watching milk production continue to climb in January the futures market seems to have thrown in the towel and become as pessimistic on milk prices as the USDA.
Current USDA Milk Price Forecasts
|1st Q 2003||2nd Q 2003||3rd Q 2003||4th Q 2003|
|Class III Price||9.60 to 9.90||9.50 to 10.10||9.70 to 10.60||10.40 to 11.40|
|Class IV Price||9.75 to 10.15||9.65 to 10.35||9.95 to 10.95||10.20 to 11.30|
Source: USDA, ERS, Livestock, Dairy & Poultry Outlook
2003 Milk Futures on the Chicago Mercantile Exchange
|Class III||$ 9.66||$ 9.11||$ 9.43||$ 9.85||$10.30||$10.64||$11.05||$ 11.48||$11.45||$11.38||$11.23||$ 11.28|
|Class IV||$10.00||$10.15||$ 10.20||$10.33||$10.40||$10.45||$10.45||$ 10.50|
|est. MILC pmt.||$ 1.55||$ 1.75||$ 1.58||$ 1.53||$ 1.50||$ 1.47||$ 1.34||$1.19|