Missouri Dairy Business Update  
Volume 7, Number 5
May 2007

Milk Prices

According to the USDA's Dairy Outlook, Forecasts, for both this year and next, are for higher milk prices across all classes. The Class IV milk price is expected to climb throughout 2007, averaging $15.60 to $16.20 per cwt for the year. The Class III price is projected to rise to an average $16.05 to $16.55 per cwt for the year. The reported all milk price is expected to be sharply higher in 2007 and will likely average $17.05 to $17.55 per cwt for the year. Strong milk prices will likely continue into 2008. The Class IV price is forecast to average $15.90 to $17.00 per cwt and the Class III prices $15.50 to $16.50 per cwt. The all milk price is forecast to average $17.00 to $18.00 per cwt for 2008."

According to Bob Cropp at the University of Wisconsin, "Higher dairy product prices may dampen milk and dairy product sales some during the second half of the year. As mentioned, dry why prices may weaken some later this year as sales slow. Milk and dairy product prices are very sensitive to rather small changes in production and/or sales. So how well cows milk this summer and how milk and dairy product sales hold up
will have a major impact on these prices. Prices could go higher than what futures are now indicating, but they could also go lower. But, either way prices will stay well above 2006 levels and the averages for the year will break the 2004 record."

Milk Futures on the Chicago Mercantile Exchange
5-24-07
May
Jun
July
Aug
Sep
Oct Nov Dec Jan 08 Feb Mar Apr
Class III $17.55 $19.68 $19.65 $18.85 $18.69 $18.00 $17.38 $16.90 $16.44 $15.70 $15.60 $15.60
Class IV $17.55 $18.10 $19.80 $20.50 $20.80 $19.80 $19.80 $18.65 $17.45 $17.20 $17.30 -
Butter Futures $1.45 $1.49 $1.50 $1.53 $1.54 $1.53 $1.55 $1.56 $1.57 $1.55 $1.55 $1.50

 

Current USDA Milk Price Forecasts
5-21-07
2nd Q 2007
3rd Q 2007 4th Q 2007 1st Q 2008
Class III Price $16.86 to $17.16 $16.80 to $17.40 $16.41 to $17.31 $15.97 to $16.97
Class IV Price $16.44 to $16.84 $16.54 to $17.24 $16.55 to $17.55 $16.06 to $17.16
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