Milk Prices

According to Bob Cropp's Dairy Outlook, "The June Class III price was $20.25 and the Class IV price $15.92. With cheese prices weaker, the July Class III price will be around $18.20. Higher butter and nonfat dry milk prices will increase the July Class IV price to around $16.95. Cheese prices could show some weakness in August, especially if milk production continues to increase 3% or more, but recover some September through early December. Nonfat dry milk prices and butter prices could improve some as well. Class III prices August to year’s end could range $18.00 to $19.50 and Class IV prices increase to and stay above $17.00."

According to the USDA Dairy Outlook, "Higher feed costs should ultimately slow increases in milk production next year. However, this year, the dairy herd continues to expand and output per cow continues to rise, albeit at a slower pace. Herd expansion should slow in the third and fourth quarters compared with the first half of 2008. A slight contraction should become apparent in 2009. Milk production will continue to expand both this year and next as output per cow continues a gradual rise. Demand in the major product sectors remains strong, especially export demand. Prices both this year and next will remain near 2007 levels."