|Missouri Dairy Business Update|
|Volume 4, Number 7|
According the USDA's latest Dairy Outlook, "Milk production remains below a year earlier and is unlikely to recover substantially until after year end. Recovery in cheese demand appears solid, although some slippage in use is possible as a delayed effect of the high prices. Also, the butter market has shown some strength, while nonfat dry milk usage has been boosted by commercial exports. Recent wholesale price drops have lowered expectations for second-half farm milk prices. Even so, milk prices are projected to average well above a year earlier. For all of 2004, prices received by farmers are expected to be more than $3 per cwt above 2003's $12.55."
According to Bob Cropp at the University of Wisconsin, "But with milk production declining both seasonally and from a year ago, existing stocks of both cheese and butter are not adequate to fulfill the strong sales period later this fall and early winter. So both cheese and butter prices have a strong probability to strengthen in August and early September and strengthen milk prices. The Class III price is likely to stay above average for the remainder of the year as well and for the first quarter of 2005, depending upon any improvement in milk production in the months ahead."
Historical Missouri milk prices may be found at: http://agebb.missouri.edu/dairy/mkt/index.htm
Hedging Opportunity Chart for next 12 Months http://www.uwex.edu/ces/milkmarketing/