Except in high Class I milk utilization areas, dairy producers’ milk checks should improve a little based on February 2024 Federal Milk Marketing Order (FMMO) blended milk class prices.
Announced on Feb. 28, FMMO Class II, III and IV prices were slightly higher compared to a month earlier, offsetting a decline in the advanced Class I base price. A wide Class III-IV price spread will maintain substantial Class IV depooling incentives. February 2024 FMMO pooling estimates, uniform prices and producer price differentials (PPDs) will be released on March 11-14 and summarized on March 15. Watch Progressive Dairy’s website for an update.
February class prices
Class prices announced on Feb. 28 were:
- At $20.53 per hundredweight (cwt), the February Class II milk price is up 49 cents from January but 30 cents less than February 2023.
- At $16.08 per cwt, the Class III milk price rose 91 cents from January but is $1.70 less than February 2023.
- At $19.85 per cwt, the February 2024 Class IV milk price is up 46 cents from January and 99 cents more than February 2023.
Potentially affecting FMMO pooling, the February 2024 Class IV milk price is $3.77 more than the month’s Class III milk price.
- The February 2024 advanced Class I base price was previously announced at $17.99 per cwt, 49 cents less than January 2024 and $2.79 less than February a year ago.
Butterfat, protein values up
Contributing to the February milk class price calculations, the values of both butterfat and protein were up from the previous month. The value of butterfat increased about 12.7 cents, to $3.10 per pound. The value of milk protein rose about 10 cents from January to about $1.23 per pound.
The value of nonfat solids was steady at about $1.03 per pound, while the value of other solids increased about 3 cents, to 27.4 cents per pound.
Looking ahead
Based on FMMO advanced prices and current futures prices, the outlook for February milk prices is mixed.
Already announced, the March 2024 advanced Class I base price is $18.80 per cwt, 81 cents more than February 2024 but 19 cents less than March a year ago.
As of trading on Feb. 28, the Chicago Mercantile Exchange (CME) Class III milk futures price closed at $17.24 per cwt for March, up $1.16 from the February price. The Class IV milk futures price closed at $20.05 per cwt for March, up about 20 cents from February.
If Class III-IV futures prices hold, the March Class III-IV milk price gap will be $2.81 per cwt, shrinking but maintaining incentives for Class IV depooling.
