Milk Prices

According to Bob Cropp's Dairy Outlook, "Dairy product prices and milk prices should continue to strengthen from current levels each month through December and into 2010. There are differences in opinions as to how much strength we can expect. The Food and Agricultural Policy Research Institute (FAPRI) recently reported to U.S. Congress that for 2009 the Class III price could average $11.78, the Class IV price $10.55 and the U.S. All Milk price $13.08. USDA in its March outlook gave the following
ranges for 2009: Class III $11.05 to $12.05, Class IV $9.95 to $11.05 and the U.S. All milk price $12.05 to $13.05. I could see the Class III price and the U.S. All Milk price ending up being at least $1.00 higher than these two forecasts. Currently Class III futures are averaging higher than these forecasts at $12.93 for the year and Class IV at $10.87. If these future market prices materialize, the U.S. All Milk Price would average near $14.00. But, even with these higher milk price relatively high feed and other costs keeps operating margins for dairy farmers at unfavorable levels. MILC payments which kicked in for February (estimated around $1.50 for February) will only provide partial relief from existing depressed milk prices. As we look further ahead, the slow down in milk production, and hopefully with some economic recovery, milk
prices will continue to improve through the year and into 2010."

Missouri's USDA Farm Service Agency office reports that the county offices will have the software to start making MILC payments as of April 1. Dairy producers should start receiving payments within the following week, then every 30 days or so as long as MILC payments continue.