Milk prices continue to buckle under the weight of a burgeoning milk supply.
According to the USDA’s announcement of class prices on March 31, the Class III price plunged $1.09 — to $11.11 for March. It also is $2.97 less than a year ago.
The Class II price fell 93 cents — to $11.69. Meanwhile, the Class IV price sunk below $11. It fell 42 cents — to $10.68. One year ago, the Class II and IV prices were $13.25 and $12.66, respectively.
Despite increasing milk per cow and cow numbers, cheese prices have regained some stretch in their waist band since dipping precipitously during late February. In fact, the block cheese price at the Chicago Mercantile has since risen above the government support price. On March 30, block cheese was unchanged at $1.165 per pound at the CME — 3.36 cents above support. Barrels, which have not fallen below support this year, inched up a quarter of a cent from the previous day to $1.1325. That’s also 3.11 cents above the support price for barrel cheese.
Still, the milk-price forecast is grim. USDA and market-analyst price projections call for the average Class III price to fall short of $12 this year. Current USDA price projections put the average Class III price at about $11.80 for the year. That’s down $2.25 versus the 2005 average Class III price of $14.05.