Missouri Dairy Business Update Commercial Agriculture
Volume 3, Number 7
July 2003

Milk Prices

Better milk prices are just around the corner! Based on current futures, mailbox prices should hit $15.00 or better for many Missouri dairymen by October. However, USDA's outlook report below, suggests you would do well to consider hedging some fall and winter milk at these levels.

According to the latest USDA Dairy Outlook, MILK PRICES "Unless milk production declines become precipitous or unexpected sales strength develops for other dairy products, cheese prices probably will trend downward once the current cycle of pipeline stock building runs its course. Only temporary relief from low farm milk prices is seen this summer and early autumn." COW SLAUGHTER "First-half cow slaughter is over 8 percent above year earlier-levels and the largest cow slaughter since 1997. Dairy cow slaughter was up 13 percent, the largest since 1997, the result of abnormal culling and low milk prices."

Historical Missouri milk prices may be found at: http://agebb.missouri.edu/modbu/milkprices.htm

2003 Milk Futures on the Chicago Mercantile Exchange
7/29/2003 July Aug Sept Oct Nov Dec Jan-04 Feb Mar Apr May June
Class III Price $11.75 $13.64 $13.96 $13.46 $12.67 $12.34 $12.05 $11.70 $11.75 $11.70 $11.60 $11.90
Class IV Price $10.17 $10.45 $10.65 $10.36                
est. MILC pmt. $ 1.76 $ 1.22 $ 0.13 $ -                
Note: Estimated MILC Payment from

Current USDA Milk Price Forecasts
17-Jul-03 1st Q 2003 2nd Q 2003 3rd Q 2003 4th Q 2003
Class III Price 9.52 9.62 11.30 to 11.70 10.35 to 11.05
Class IV Price 9.89 9.74 9.85 to 10.35 9.90 to 10.70
Source: USDA, ERS, Livestock, Dairy & Poultry Outlook

MILC payments for July milk will be $1.76/cwt., for August $1.22. Based upon current futures, (7/29/2003), the MILC payment will be down to $0.13 in September and $0.00 in October! To view the calculations behind the MILC payments and to check the very latest MILC payments, check the NE Milk Marketing Administrators website at: http://www.fmmone.com/Northeast_Order/MILC%20calculator/DMLP.htm

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