According the USDA's latest Dairy Outlook, "Cheese and butter markets have undergone dramatic adjustments following their extreme April price peaks. Prices should be less volatile during the rest of the year if the adjustment process is as close to complete as it appears. However, prices are expected to slip slowly as market fundamentals ease."

According to Bob Cropp at the University of Wisconsin, "In summary, while milk production overall showed some improvement in July, it is a slow improvement that will keep milk prices above the 5-year average, at least through this year and perhaps in to 2005. Indications are that wet weather had reduced the supply of high quality alfalfa. In addition, the cooler than normal summer temperatures, while good for better milk per cow, could pose a problem for this years soybean and corn crop, if an early frost would set in. So the over all forage, grain and protein situation for this winter is still unclear and could impact the direction of milk prices this winter."

2004 Milk Futures on the Chicago Mercantile Exchange
8/30/2004	Sept	Oct	Nov	Dec	Jan	Feb	Mar	April	May	June	July
Class III	14.22	12.91	12.20	12.14	11.89	11.90	11.88	12.05	12.05	12.25	12.73
Class IV	14.25	13.00	12.25	12.25	12.00	12.00	12.00	12.25	12.25	12.25	12.75
Butter Futures	1.62	1.59		1.52			1.53		1.52		1.53

Current USDA Milk Price Forecasts
8/18/04	1st Q 2004	2nd Q 2004	3rd Q 2004	4th Q 2004
Class III Price	12.66	19.31	14.35 to 14.65	12.90 to 13.50
Class IV Price	12.43	14.26	12.20 to 12.60	11.45 to 12.15
Source: USDA, ERS, Livestock, Dairy & Poultry Outlook

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/