Dairy producers’ June milk checks should continue to strengthen, based on a preview of Federal Milk Marketing Order (FMMO) milk class prices. Announced on July 3, FMMO Class II, III and IV prices were all higher compared to a month earlier, with increased butterfat and protein values providing the muscle. The Class III-IV price spread continued to shrink.
June 2024 FMMO pooling estimates, uniform prices and producer price differentials (PPDs) will be released on July 11-14 and summarized on July 15. Watch Progressive Dairy’s website for an update.
June class prices
Class prices announced on July 3 were:
- At $21.60 per hundredweight (cwt), the June Class II milk price is up 10 cents from May and $2.77 more than June 2023. It’s the highest since October 2023.
- At $19.87 per cwt, the Class III milk price jumped another $1.32 from May to an 18-month high and is $4.96 more than June 2023.
- At $21.08 per cwt, the June 2024 Class IV milk price is up 58 cents from May and is $2.82 more than June 2023. It’s also the highest since October 2023.
Potentially affecting FMMO pooling, the June 2024 Class IV milk price is $1.21 more than the month’s Class III milk price, down from $1.95 in May and the narrowest spread since September 2023.
Adding to price strength, the advanced Class I base price was previously announced at $20.08 per cwt, up $1.62 from May 2024 and $2.07 more than a year ago. It’s the highest Class I base price since February 2023.
Butterfat, protein values move higher
Contributing to the June milk class price calculations, the value of butterfat and protein were again both up from the previous month.
The value of butterfat increased about 8 cents from May, hitting about $3.54 per pound. The value of milk protein rose nearly 32 cents to $2.05 per pound, the highest since September 2023.
The value of nonfat solids was up about 3.5 cents at 99.9 cents per pound, while the value of other solids rose about 1.5 cents to 23.3 cents per pound.
Looking ahead
Based on FMMO advanced prices and current futures prices, the outlook for July milk prices is mixed to mostly stronger.
Already announced, the July 2024 advanced Class I base price is $21.11 per cwt, up $1.03 from June 2024 and $3.79 more than a year ago. It’s the highest Class I base price since January 2023.
July Class II, III and IV milk prices will be announced July 31. As of trading on July 2, the Chicago Mercantile Exchange (CME) Class III milk futures price closed at $19.42 per cwt for July, which would be down 45 cents from the June price. The Class IV milk futures price closed at $21.41 per cwt for July, up 33 cents from June. If Class III-IV futures prices hold, the July Class III-IV milk price gap will increase to $1.99 per cwt, providing some incentives for Class IV depooling.
