If you haven’t been paying attention to the futures market lately you’re in for quite a shock. At the close of markets today, the average price for Class III milk futures contracts on the Chicago Mercantile Exchange from March through December was $15.03.

Within those 10 months, six contract months were trading near $16. The highest within the April through September pack is the May contract which closed at $16.16 today.

Apparently seasonality of the Class III futures market has been tossed aside. As recent as last week, market analysts were predicting a peak of Class III prices in the $14 to $15 range in September. Since the futures market has surpassed that mark, and many contract months are trading above their maximum historical price, you definitely ought to think about locking in a price for at least a portion of the milk you produce.

Listed below is today’s Class III closing prices. Comparison with the chart "Class III/BFP prices from 1988 to present" shows that the March through August contracts are all trading at or above their historical maximum price.

Remember the cash cheese and futures markets respond quickly to new market news, so these prices might not stick around for long.

CME

Class III Futures Settlement Prices March 11, 2004
March    $13.77             Historical Max  $12.81
April       $15.86             Historical Max  $13.09
May        $16.16             Historical Max  $13.83
June       $15.99           Historical Max. $15.02
July         $15.95            Historical Max. $15.46

Aug.       $15.80             Historical Max. $15.79
Sept.      $15.79            Historical Max. $16.26
Oct.        $14.78           Historical Max. $16.04
Nov.       $13.36             Historical Max.  $16.84
Dec.       $12.84            Historical Max.  $17.34

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