Missouri Dairy Business Update  
Volume 5, Number 4
April 2005

Milk Prices

According to the latest USDA Outlook, "The strong holiday season movement reflected generally good economic and income conditions for most Americans, with both restaurant and home use showing substantial recovery. In addition, there appeared to be no significant carryover effect from the very high spring and summer prices. The holiday strength bodes well for 2005 dairy demand as well as helping to explain price buoyancy early in the year. Preliminary information indicates that cheese use remained quite strong in
February, particularly for other cheese. Total sales, however, were pulled down slightly by a drop in butter. Analysis of butter disappearance is particularly complex this year because of the quite early western Easter, normal timing of Passover, and quite late eastern Easter. Nonfat dry milk sales continued to soar."

According to the April Dairy Outlook published by Bob Cropp at the University of Wisconsin, " With milk production continuing to show improvement we need to keep a close eye on stocks of dairy products. There are some indications that both butter and cheese stocks are building, especially butter stocks. But, if the economy can continue to grow and as a result, commercial disappearance continues to grow to absorb more product, milk prices will stay relatively good."

 
2005 Milk Futures on the Chicago Mercantile Exchange
4/19/05
Apr
May
Jun
July
Aug
Sept
Oct
Nov
Dec
Jan-06
Feb
Class III
14.61
14.06
13.87
14.19
14.50
14.68
13.70
13.45
13.16
12.87
13.05
Class IV
13.00
13.10
13.20
13.70
13.70
13.70
13.50
13.50
13.20
-
-
Butter Futures
-
1.48
-
1.53
-
1.54
1.55
-
1.54
-
est. MILC pmt.
-
-
-
-
-
-
-
-
0.04
-
-
Source: Estimated MILC Payment from http://cpdmp.cornell.edu/

Current USDA Milk Price Forecasts
4/15/05
1st Q 2005
2nd Q 2005
3rd Q 2005
4th Q 2005
Class III Price
$14.31
$13.55 to $13.95
$13.15 to $13.85
$13.30 to $14.30
Class IV Price
$12.64
$12.15 to $12.65
$12.15 to $12.95
$12.15 to $13.25
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/


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