According to USDA's July Dairy Outlook, "Whether demand can continue to absorb likely supplies is questionable. Economic and income growth are expected to be brisk enough to sustain recent demand, but this year’s experience implies that erratic demand is more likely. Second-half seasonal increases in dairy product and farm milk prices are projected to be quite modest, and prices may continue to seesaw. On the other hand, a major drop in prices does not seem likely through the end of the year. For the year, farmers are projected to receive an average price only about $1 per cwt less than last year’s record."

According to the July Dairy Outlook published by Bob Cropp: "As already mentioned, the seasonal decline in milk production, stocks fairly well in balance and the need to build adequate inventory for the strong seasonal fall sales may help to hold up cheese, butter and milk prices at least through September. Nevertheless, the prediction of $15.00 plus Class III price for September is no longer likely. A peak just above $14.00 is more likely. While the Class III futures is showing a drop in Class III prices after September, they could still be a little optimistic after this production report., especially if the next production report shows similar milk production increases. A Class III price in the low $13.00’s by November and in the high $12.00’s by December is a real possibility. While these prices may seem low, they would still be above the 5-year averages for these months."

Current USDA Milk Price Forecasts
7/18/05	1st Q 2005	2nd Q 2005	3rd Q 2005	4th Q 2005
Class III Price	$14.31	$14.10	$13.65 to $14.05	$12.75 to $13.45
Class IV Price	$12.64	$12.40	$12.50 to $13.00	$11.90 to $12.70
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/