Class III milk futures did pretty good last year because the year started off slow and built to a nice level.
According to CNN Money, they gained better than any other commodity — better than gold, crude oil, pork bellies, corn and other food futures — during 2011. Milk futures reportedly rose 35.7 percent last year. Click here for the entire article.
Prices did start very low in 2011, according to Greg Scheer, dairy analyst with Doane Advisory Services in St. Louis. On Jan. 3, 2011, January Class III futures were at $13.19, while a year later on Jan. 3, 2012, January futures were at $15.15.
If one looks at the growth in nearby futures contracts as the year goes by, which involves rolling over into different months, he will get a different rate of increase than using other methods of comparison.
A better comparison for this story would probably be comparing January 2011 and January 2012 futures against each other as of the first of the year or the January 2012 contract from Jan. 1, 2011, to current, Scheer says.
“I think it is difficult to make the comparison that they did in this story, but the general idea is OK in that prices were up very strongly,” Scheer says.
It’s important to note, as well, that Dairy Herd Network had this story a week before CNN Money did. Click here.