Missouri Dairy Business Update Commercial Agriculture
Volume 3, Number 9
September 2003

Milk Prices

According to the latest USDA Dairy Outlook, "Weakened milk production and recovering sales led to significantly tightened late summer cheese markets while most other dairy markets stayed fairly soft. Adjustments in coming months will test whether recent cheese and milk prices can hold. Milk per cow in spring and early summer was virtually unchanged from a year earlier. Compared with the 5-year average, recent growth in milk per cow was only slightly more than 1 percent per year--barely more than half the long-run trend. The jumps in wholesale cheese prices will boost farm milk prices during the second half of 2003. Farmers are projected to receive over $1.50 more per cwt of milk than they did a year earlier. Even so farm milk prices will stay much lower than those of the high-price years of 1998, 1999, or 2001. Because of the price strength, MILC payments will not be made on September and probably October milk. The MILC payment rate will rise if cheese prices start to crumble, but payments are not expected to return to high rates until well into winter"

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

2003 Milk Futures on the Chicago Mercantile Exchange
10/16/2003 Sept-03 Oct Nov Dec Jan-04 Feb Mar Apr May June July Aug
Class III Price $14.24 $13.90 $12.84 $12.24 $11.92 $11.50 $11.46 $11.43 $11.40 $11.95 $12.25 $12.60
Class IV Price $10.40 $10.36                    
est. MILC pmt. $ N/A $ N/A                    
Note: Estimated MILC Payment from

Current USDA Milk Price Forecasts
17-Sep-03 1st Q 2003 2nd Q 2003 3rd Q 2003 4th Q 2003
Class III Price 9.52 9.62 13.05 to 13.25 11.40 to 11.90
Class IV Price 9.89 9.74 9.90 to 10.20 9.90 to 10.50
Source: USDA, ERS, Livestock, Dairy & Poultry Outlook

MILC payments for August milk will be $0.00/cwt. for September. Based upon current futures, (9/17/2003), the MILC payment will be $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_Prices/MILC%20calculator/DMLP.htm

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