October Class IV milk price highest since November 2014
November 9, 2021
Federal Milk Marketing Order (FMMO) Class III and Class IV milk prices moved higher in October. In the case of the Class IV price, it’s the highest in nearly seven years.
At $17.83 per cwt, the October 2021 Class III price is up $1.30 from September and the highest since May. It remains $3.78 less than October 2020, however, when USDA pandemic food box purchases of cheese pushed the Class III price to $21.61 per cwt.
Through the first 10 months 2021, the Class III milk price averaged $16.86 per cwt, down $1.03 from the same period in 2020.
At $17.04 per cwt, the October 2021 Class IV price is an 83-month high dating back to November 2014. The October 2021 price is 68 cents from September and $3.57 more than October 2020. The January-October 2021 Class IV average is $15.44 per cwt, up $1.92 from the same period a year earlier.
Class III-IV milk prices moved higher due to increases in cheese and butter prices, which drove higher values of both protein and butterfat used in monthly milk price calculations. At about $3.01 per pound, the value of milk protein in October FMMO milk price calculations rose about 41 cents from September and is the highest since May. The value of butterfat rose less than a penny in October to just over $1.94 per pound. Despite the meager increase, it’s the highest since June.
The 79-cent spread between October Class III and Class IV prices was the widest since June, opening the door for some potential depooling. FMMO administrators are scheduled to announce October uniform prices, producer price differentials and pooling volumes beginning about Nov. 11.