|Missouri Dairy Business Update|
|Volume 9, Number 10|
According to Robert Cropp's Dairy Outlook, "The recovery of farm milk prices continues. The Class III price for October will be around $12.80 compared to $9.97 back in July. The Class IV price will be around $11.60 compared to $10.15 last July. These higher prices are driven by improvements in cheese, dry whey, and nonfat dry milk and butter prices. These improved prices are being driven by both the supply of milk and dairy products, and improved demand.
In summary, milk prices will continue to improve this year and for 2010. As of October 20th, Class III dairy futures were $14.64 for December and improved to $15.42 for July 2010. But, I believe the odds are that prices could do better than this with December above $15, and $16.00 or higher by July 2010.
MILC payments will decline as milk prices increase and lower feed
costs, mostly due to lower hay prices, reduces or eliminates the feed adjuster to the target price.
Preliminary September prices for Corn (3.32 per bushel) soybeans ($9.85 per bushel) and hay
($110 per ton) means the cost for a 16% dairy ration is $6.59 per 100 pounds, well below the
trigger of $7.35 for a feed adjustment to the target price. The preliminary MILC payment for September is $1.24 per hundredweight and payments may disappear by December."
Historical Missouri milk prices may be found at: http://agebb.missouri.edu/dairy/mkt/index.htm