Class III milk prices are likely to slip as the dairy product holiday sales season draws to a close.
Prices: On Monday, Dec. 16, 2013 spot prices for cheddar cheese blocks and barrels at the Chicago Mercantile Exchange (CME) were $1.9275/lb. and $1.8225/lb., respectively. CME block and barrel cheese prices are up since late November (11/25/13) +$0.0775/lb. and +$0.0750/lb., respectively. During the same time period, butter is down to $1.5500/lb. (-$0.1150/lb.). The CME Class III futures averages (12/16/13) for 2013 was up to $17.99/cwt. (+$0.06/cwt.), the next 12-months was up to $17.91/cwt. (+$0.58/cwt.), and 2014 was up to $17.65/cwt. (+$0.57/cwt.). These Class III futures averages correspond to potential USDA Michigan mailbox prices of $19.01/cwt. (2013), $18.92/cwt. (next 12-months), and $18.67/cwt. (2014). Figure 1 shows the current (12/16/13) CME Class III futures averages for 2013, the next 12-months, and 2014 are at the 66th, 65th, and 63rd percentiles, respectively.
Source: MSUE