Thursday, April 2, 2009

NASS vs. CME prices

The Federal Milk Marketing Orders calculate protein and somatic cell count payment value based on cheese prices. The most commonly quoted prices for cheese come from the Chicago Mercantile Exchange (CME). Those are not the cheese prices used to determine the value for protein and somatic cell count. The Federal Milk Orders use a market survey.

The National Agricultural Statistical Service (NASS) Market Survey runs about two weeks behind the CME published values.

Hoards Dairyman publishes the weekly cheese prices in graph form on thier website showing both CME and NASS prices. The graph above is through last week. The up-to-date numbers (both NASS & CME) are always available on the Hoards site at the above link.

The difference is timing between the NASS and CME releases allows one to get an early estimate of where protein prices are going. When the Class III protein price is released at the end of this week (April 3), it will be based on the last 5 weeks of NASS Market Survey prices. By watching the CME prices, you can estimate where the NASS pricing is going two weeks in advance.

The good news is that no matter which number you review, cheese prices are headed up.

This Friday, April 3 the March Class III prices will be announced - expect protein to be up slightly and fat up more.

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