Missouri Dairy Business Update  
Volume 6, Number 2
February 2006

Milk Prices

According to Bob Cropp's February Outlook, "Milk prices hopefully will re-bound some as we move through the year. But, it will take good sales of milk and dairy products and some slowing of the growth in milk production. As indicated, cow numbers are not likely to decline before the 4th quarter, and unless weather turns unfavorable, milk per cow, while not continuing to increase 4%, will probably continue at the 2% to 3% increase for several months. This means another 3% or so more milk for 2006. Wholesale and retail dairy product prices should be more favorable during 2006 for good sales. But a growth in commercial disappearance any where near 3% is unlikely. A growth between 1.5% and 2% is probably more reasonable. But yet, I do expect some recovery in milk prices as early as the end of the second quarter and into the third quarter of the year than what the futures market is currently showing."

2006 Milk Futures on the Chicago Mercantile Exchange
02/28/06
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov Dec Jan 07
Class III
$12.12
$11.15
$10.95
$10.99
$11.01
$11.15
$11.55
$11.61
$11.64
$11.55
$11.60
$11.62
Class IV $11.36 $11.30 $11.30 $11.30 $11.30 $11.30 $11.75 $11.90 $11.90 $11.90
 
-
Butter Futures
$1.23
$1.19
$1.225
$1.215
$1.25
$1.245
$1.30
$1.2925
$1.285
$1.300
$1.290
$1.31
Est. MILC* $0.105** $0.408** $0.81 $0.81 $0.0.81 $0.81 $0.66 $0.61 $0.61 $0.61 - -
* MILC estimates derived from: ($13.69 - (Higher of Class III or IV price) *0.34)
** Denotes actual payments already establish, which will be paid under the program as soon as the FSA offices implement.

Current USDA Milk Price Forecasts
02/15/06
1st Q 2006
2nd Q 2006
3rd Q 2006
4th Q 2006
Class III Price
$12.40 to $12.80
$11.65 to $12.35
$11.60 to $12.60
$11.70 to $12.70
Class IV Price
$11.50 to $12.65
$11.30 to $12.10
$10.95 to $12.05
$10.80 to $11.90
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/


[ Back to Missouri Dairy Business Update Index ]

AgEBB | Dairy Focus Team | Dairy Publications