According to the October Dairy Outlook published by Dr. Bob Cropp at the University of Wisconsin, "The nation’s milk supply continues to grow at a relatively strong pace. USDA’s latest milk production report shows September milk production for the 23 reporting states up 4.9% from a year ago. This marks the 5th consecutive increase of 4% plus.

For now Class III prices for 2006 could be in the high $12.00s for the first quarter, in the
mid-12.00s for the second quarter, than increase in the 3rd quarter approaching $14.00 in
September before falling seasonally during the fourth quarter to $12.50 by December. But, dairy producers need to keep a close watch on changing market factors and to implement their price risk management strategies as any new developments take place."

 

2005 Milk Futures on the Chicago Mercantile Exchange
10/27/05	Oct	Nov	Dec	Jan-06	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep
Class III	$14.39	$13.67	$13.46	$13.07	$12.70	$12.75	$12.60	$12.60	$12.73	$13.21	$13.42	$13.70
Class IV	$13.15	$12.90	$12.80	-	-	-	-	-	-	-	-	-
Butter Futures - cash settle	$1.645	$1.535	$1.50	$1.51	$1.50	$1.49	$1.495	$1.49	$1.495	$1.495	$1.525	$1.525
Source: CME Daily Dairy Report

Current USDA Milk Price Forecasts
10/16/05	4th Q 2005	1st Q 2006	2nd Q 2006	3rd Q 2006
Class III Price	$13.65 to $14.05	$12.65 to $13.35	$11.75 to $12.75	$11.75 to $12.75
Class IV Price	$13.10 to $13.60	$12.00 to $12.80	$11.15 to $12.25	$11.15 to $12.25
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/