Friday, June 5, 2009

May Component Prices Announced

May Class III prices were announced rather early today. It was not good news. As predicted in an earlier post to this blog, prices dropped significantly. To be fair, there were some increases vs. April, 2009. Butterfat increased from $1.20 to $1.26/lb. and other solids finally went positive, increasing from from a -$.004 to $.003/lb.

However, the numbers that really count hit major lows. Protein dropped to $1.75/lb, the lowest level since April, 2001 - over eight years ago!

The Class III milk price was announced at $9.84, the lowest (with the exception of February, 2009) in six years.

These prices have also changed the pie chart of the milk check which is typically published with the price announcements. For the first time since these were published, protein made up only 50% of the milk check.
Protein is still very important, making up half of the milk check, but this is a new low in the recent statistics.

The Chicago Mercantile Exchange (CME) weekly prices will be updated this Friday afternoon after the Friday trading period closes. Based on the trading numbers so far this week, there is not much change expected.

Is there light at the end of the tunnel? Nothing has significantly changed in the basic economic data.

When will prices improve?

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