Does anyone still believe that we can predict what the milk price will be in 4 months, 6 months, or 12 months. With today’s global economy and our ability to get instant news from all over the world, the milk markets are gyrating like a roller coaster at Six Flags! Look at these graphs of the Class III milk price variation over the last 23 years and the last 5 years:
2000 – 2023: $16.30 variation ($8.90 - $25.20)
2018 – 2023: $13.83 variation ($11.37 - $25.20)
Can we predict what milk is going to do next month? Or, better yet, predict what dramatic changes we might see over the next 12 months?
There are 2 great truths in the dairy markets if we choose to see them. To quote Carl Sagan: “Better the hard truth, I say, than the comforting fantasy. And in the final tolling it often turns out that the facts are more comforting than the fantasy.”
1. Back in September of last year we could have locked in this summer’s entire milk production for over $20.00.
2. The fall of this year will again bring us better prices.
I’ve graphed the monthly average Class III milk price over that past 5 years. As you can see, October and November have consistently brought us better prices.
I hate to be that guy that uses 20:20 vision to look backward and point out the obvious that everyone sees. Yet…… it is so obvious, and we keep making the same mistakes over and over again. In the future, when we see opportunities to lock in profits, we need to act. And, when prices are high we need to STOP assuming that they’ll always stay there. And…. when prices are low like they are now, take comfort in the fact that they WILL come back up. Till the fall, best wishes and hang in there!
