Missouri Dairy Business Update  
Volume 8, Number 4
April 2008

Milk Prices

According to the Bob Cropp's Dairy Outlook, "Due to lower cheese, dry whey and butter prices the end of March and early April the mover for May Class I milk was announced almost $2.00 lower than April, $18.61 for April and $16.62 for May. While dairy product prices will average higher for the last half of April, lower prices earlier will result in an April Class III price of around $17.00, down about $1.00 from $18.00 in March.

Class III futures are very bullish. Class III prices are back to about $17.80 for May, with June at $18.55 and then above $19.00 through March of 2009 and even above $18.00 through March 2010. These prices are surely possible, but they will require milk production to not increase much more than 2%, domestic sales remain strong and expected increased exports of cheese, butter, dry whey and nonfat dry milk come to pass. Prices are very sensitive to rather small changes in or anticipated changes in any of these factors and can result in quite different milk prices. Price risk remains very real in the dairy industry."

Milk Futures on the Chicago Mercantile Exchange
4-29-08
Apr 08 May June July Aug Sept Oct Nov Dec Jan 09
Class III $16.72 $17.97 $18.60 $19.17 $19.23 $19.36 $19.22 $19.25 $19.18 $18.65
Class IV $14.78 $15.00 $16.25 $16.50 $16.90 $17.05 $17.00 $17.25 $17.25 $16.80
Butter Futures $1.36 $1.41 $1.44 $1.47 $1.50 $1.51 $1.52 $1.51 $1.53 $1.49

Current USDA Milk Price Forecasts
4-17-08
1st Q 2008 2nd Q 2008 3rd Q 2008 4th Q 2008
Class III Price $18.12 $15.42 to $15.82 $15.75 to $16.45 $15.86 to $16.86
Class IV Price $15.04 $14.57 to $15.07 $15.46 to $16.26 $16.37 to $17.47
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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