Missouri Dairy Business Update  
Volume 9, Number 11
November 2009

Milk Prices

According to Robert Cropp's Dairy Outlook, "Milk prices continue their upward trend of improvement. The Class III price, which was $9.97 for both June and July improved to 12.82 for October and will be around $14.05 for November."

"World economies are recovery quicker than anticipated and countries like China, Mexico and others are increasing purchases of dairy products on the world market. As of November 5th, the European Union reduced export subsidies to zero except for butter and butter oil. Milk production is increasing at a much lower level than earlier anticipated in both New Zealand and Australia. World market prices are increasing. So we can anticipate U.S. dairy exports to increase for the remainder of this year with further increases in 2010."

"If improved domestic sales and dairy exports, as well as further reduction in milk production
materialize as anticipated, Class III prices could be above $15.00 and the U.S. All Milk Price
approaching $16.25 by second quarter of 2010. By the fourth quarter the Class III price could be
near $16.00 and the All Milk Price approaching $17.25. But, we must realize that milk prices are
very sensitive to rather small changes in either sales and/or milk production."

Futures on the Chicago Mercantile Exchange
November 25, 2009
Nov Dec Jan 10 Feb Mar Apr May June July Aug
Class III Milk (per cwt.)
14.08 14.83 14.94 15.08 15.37 15.50 15.67 15.85 16.15 16.20
Class IV Milk (per cwt.)
13.49 13.74 13.85 13.98 13.86 14.65 14.62 14.56 14.59 14.63
Butter (per lb.)
1.38 1.50 1.53 1.57 1.63 1.65 1.66 1.68 1.68 1.68
Source: http://www.cmegroup.com/trading/commodities/
Current USDA Milk Price Forecasts
4th Q 2009 1st Q 2010 2nd Q 2010 3rd Q 2010
Class III Price $13.40 to $13.70 $14.22 to $14.82 $14.63 to $15.53 $15.26 to $16.26
Class IV Price $13.00 to $13.40 $14.01 to $14.71 $13.88 to $14.88 $14.41 to $15.51
Source: USDA, ERS, Livestock, Dairy & Poultry Outlook

Historical Missouri milk prices may be found at: http://agebb.missouri.edu/dairy/mkt/index.htm

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