Missouri Dairy Business Update  
Volume 8, Number 11
November 2008

Milk Prices

According to Bob Cropp's Dairy Outlook, "Milk prices are trending much lower than a year ago due to lower cheese, dry whey and nonfat dry milk prices. Milk prices are not forecasted to improve and could go even lower as we finish the year and for the first half of 2009. For 2009 Class III futures are below $15.00 through May and Class IV futures are at or below $13.00 through May.

With a continued slow growth in milk production, the sixth round of CWT herd reduction and continued CWT export assistance along with some improvement in domestic sales, and perhaps exports by second half of 2009, prices could show considerable improvement for the second half of the year but still average well below 2008 prices."

Milk Futures on the Chicago Mercantile Exchange
11-21-08
Nov Dec Jan 09 Feb Mar Apr May Jun July Aug
Class III $15.50 $14.95 $14.15 $14.10 $14.10 $14.17 $14.65 $15.00 $15.32 $15.65
Class IV $13.50 $13.00 $12.25 $12.00 $12.00 $12.75 $12.75 $13.30 $13.25 $14.00
Butter Futures $1.64 $1.48 $1.42 $1.39 $1.39 $1.39 $1.39 $1.41 $1.43 $1.44

Current USDA Milk Price Forecasts
11-17-08
4th Q 2008 1st Q 2009 2nd Q 2009 3rd Q 2009
Class III Price $15.53 to $15.83 $14.65 to $15.25 $14.64 to $15.54 $14.93 to $15.93
Class IV Price $12.74 to $13.14 $11.70 to $12.40 $11.22 to $12.22 $11.47 to $12.57
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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