Weekly Dairy Market Outlook
By
Ken Bailey March
6, 2004 Dairy Futures Continue to Improve · September Class III nearing $16/cwt · Grade AA butter over $2 per pound · Block cheese reaches $1.54 per pound The cash and dairy futures markets have shown real strength in the last few weeks. Both butter and cheese prices advanced this week at the Chicago Mercantile Exchange. As of Friday, March 5, block cheese was $1.54 per pound, barrel cheese was $1.5150 per pound, and Grade AA butter was $2.11 per pound. My forecast that butter could reach $2 per pound has already been realized, and it is still just March! The milk futures markets at the Chicago Mercantile Exchange are also very active. As of today, March 5, Class III futures are expected to reach $13.57 per cwt in March and peak at $15.55 per cwt by September. These prices are not only high, but they are amazingly stable. Producers who have an opportunity to lock in prices during this period may want to consider taking advantage of these very high prices. Locking in Class III futures does not mean you will not be able to take advantage of higher butter prices. Federal order class prices are announced at 3.5 percent butterfat. Thus, if you lock in a Class III price at current levels, you could also realize higher prices for your butterfat if butter prices continue to climb. Speaking of butter prices, the real question is will
butter hit $2.50-$3.00 per pound by fall.
All indications are that available supplies cannot be found in the international
market. That’s hard to believe,
especially since butter is now above $2 per pound in the Want to get a friendly weekly reminder via email that my dairy outlook report is available? Subscribe to my email service. To subscribe, send a blank email to join-dairyoutlook@lists.cas.psu.edu.
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