Missouri Dairy Business Update  
Volume 8, Number 1
January 2008

Milk Prices

According to the Bob Cropp's Dairy Outlook, "The year 2007 will be remembered as record high milk prices. Prices average about $6.00 per hundredweight higher than 2006. Averages for the year were: Class III $18.04, Class IV and Class II both $18.36, the Class I mover $18.75 and the average U.S. All Milk Price $19.15. Lower prices are forecasted for 2008, perhaps averaging about $2.00 lower, but possibly still
ending up the second highest on record. Nevertheless, higher feed prices will shrink profit margins for dairy producers in 2008.

The Class III price, which was $20.60 for December, will be around $19.15 for January. With declining cheese prices, the Class III price will continue a decline ending the first quarter of 2008 below $17.00. The Class III price may stay in the $16.00 to high $16.00s range through the third quarter before falling below $16.00, and even $15.00, by the end of the fourth quarter. If these prices hold, the Class III price for the year would still average near $16.00. But, one needs to watch milk production, domestic sales of milk and dairy products as well as dairy exports. Changes in any of these factors as we go through the year could substantially change the price out come."

Milk Futures on the Chicago Mercantile Exchange
1-29-08
Jan 08 Feb Mar Apr May June July Aug Sept Oct
Class III $19.35 $16.84 $16.93 $16.24 $16.00 $15.96 $16.20 $16.36 $16.50 $16.26
Class IV $17.05 $15.80 $15.40 $14.80 $14.50 $14.90 $15.25 $15.66 $15.70 $16.10
Butter Futures $1.23 $1.23 $1.29 $1.32 $1.34 $1.36 $1.38 $1.40 $1.43 $1.43

Current USDA Milk Price Forecasts
1-18-09
1st Q 2008 2nd Q 2008 3rd Q 2008 4th Q 2008
Class III Price $18.71 to $19.11 $16.39 to $17.09 $14.76 to $15.76 $14.80 to $15.80
Class IV Price $17.22 to $17.72 $16.90 to $17.70 $16.47 to $17.57 $16.69 to $17.79
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