Missouri Dairy Business Update  
Volume 5, Number 6
June 2005

Milk Prices

MILC payments for June production will be $0.03/cwt

According to USDA's June Dairy Outlook, "Farmers are projected to receive about $1 per cwt less for milk than they did during the second half of 2004. Such a decrease would leave the annual average down a similar dollar per cwt from the record of a year earlier. Even so, farm milk prices could be the third highest ever and will be far higher than the low prices of 2002 and 2003. A somewhat larger decline is projected for 2006."

For MU's latest dairy supply & demand outlook, go to the quarterly outlook teleconference at http://agebb.missouri.edu/mkt/teleconf/index.htm

According to the June Dairy Outlook published by Bob Cropp at the University of Wisconsin, "In summary, milk production is anticipated to continue showing 2 to 3% or even higher increases over a year ago for the remainder of the year. Commercial disappearance will not absorb all of this increase at current prices. Yet milk prices may still experience some seasonal increase. But, with this latest milk production report the increase very likely will be less than what has been forecasted. The Class III price could very well peak below $14.50 for September, and then seasonally decline to within the $12.00 to $13.00 range for December."

2005 Milk Futures on the Chicago Mercantile Exchange
6-28-05
Jun
July
Aug
Sept
Oct
Nov
Dec
Jan-06
Feb
Mar
Apr
May
Class III
13.92
14.48
14.95
14.93
14.04
13.61
13.32
13.05
13.05
12.99
12.89
12.92
Class IV
12.69
12.76
13.05
13.10
12.80
12.80
12.80
-
-
-
-
-
Butter Futures
-
1.70
-
1.70
1.715
-
1.65
-
-
1.51
-
1.49
MILC pmt.
.03
-
-
-
-
-
.04
-
-
-
-
-
Source: Estimated MILC Payment from http://cpdmp.cornell.edu/
Source: Actual MILC Payment from http://www.fmmone.com/Northeast_Order_Prices/MILC%20calculator/DMLP.htm

Current USDA Milk Price Forecasts
6/16/05
1st Q 2005
2nd Q 2005
3rd Q 2005
4th Q 2005
Class III Price
$14.31
$13.95 to $14.15
$13.10 to $13.60
$13.20 to $14.00
Class IV Price
$12.64
$12.20 to $12.50
$12.05 to $12.65
$11.90 to $12.80
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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