Where are Milk Prices Going?
Producer milk prices are based on the wholesale price of four dairy commodities: butter, cheese, nonfat dry milk (NDM), and dry whey. The Agricultural Marketing Service does a weekly survey of these wholesale commodities. At the end of the monthly period, those survey results are combined to calculate the price for butterfat, milk protein, and “all other” for Class III milk and Class IV skim milk. The monthly periods are based on 4-week and 5-week averages. Following the weekly surveys can provide an accurate prediction of month end prices for the milk solids listed above.
Butter prices are hitting record levels. In early 2023 butter prices fell significantly, reaching a price of $2.38 per pound. In the most recent weekly survey, butter prices hit a record high of $3.33 per pound. The previous high for a month was $3.19 per pound in October 2022. If a whole month was valued at $3.33 it would result in a producer price of $3.82 per pound for butterfat, which would be a record high.
Nov 3, 2023