“But a Class III price at $19 or higher for the first quarter of next year and staying above $18 for the remainder of the year now appears quite possible,” he adds.
The Class IV price, at $17.41 in September, will be near $18.75 for October and may even go above $19 by November, Cropp says. A Class IV price of near $18 for the first half of next year appears quite possible before declining towards year’s end, he notes.
“Some are forecasting even higher prices,” he says. “Higher prices are possible but all of these price forecasts will no doubt be revised depending upon any changes in expected levels of milk production, domestic sales and exports for the months ahead. The level of exports will not only depend upon U.S. dairy product prices in comparison to world prices, but the also the extent to which U.S. dairy companies with tighter supplies will attempt to maintain international customer commitments. U.S. exports could also be impacted by how the run up in food prices, particularly in developing countries, affects their purchasing of dairy products. There also exists the possibility of deepening of the European debt crisis which would have worldwide implications. And we know that milk prices could be impacted by weather conditions and how it affects crop production next year, not only in the U.S., but in other major exporting and importing countries. Thus, several factors could dramatically change final milk prices for next year.”