Milk Prices

According to Bob Cropp's Dairy Outlook, "As milk production continues to decline from year ago levels and lower wholesale and retail prices gives some boast to domestic sales, and perhaps some slight improvement in exports, especially nonfat dry milk/skim milk powder and whey products, dairy product prices should strengthen as we move into summer. Milk prices may not show any improvement for the month of May, but in the months following farm milk prices will continue to show improvement. By July we could see the Class III price at $13.00 or higher and by November and December $15.50 or higher. The Class IV price could be $11.15 or higher by July and by November and December $12.00 or higher. This would put the U.S. All Milk Price in the $16.50 to $17.00 range by November or December. However, this optimism is currently not expressed in either dairy futures or by the USDA. Class III futures have weakened the past 10 days. Class III futures settled on April 17th at $12.56 to $14.54 for July through September and a high of just $15.02 for December. While USDA forecasts milk production for 2009 to be down 1.5% from the 190 billion pounds produced last year, their forecast is for the Class III price to average for the year just $10.65 to $11.15 and the All Milk Price $11.85 to $12.35. Let’s hope prices turn out better than this because before most dairy producers can realize favorable returns over operating costs
they need a Class III price of at least $16.00 to $17.00 and an All Milk Price at least $17.00 to $18.00."