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Milk Protein Prices Leap! New Data Released Today.

For the last five weeks, milk protein values have gone up consistently and significantly with the increase in cheese prices.  As covered in the August 13 post to this blog, cheese prices have been falling in 2023.  They are now recovering and recovering fast.  Block cheese prices have increased by 38% and Barrel cheese prices have increased by 28% in the last five weeks.  Blocks are again priced above Barrels for the last five weeks, which is back to “normal.” 

Butter prices remain stable as predicted in the August 13 post to this blog.  From the recent low in mid-May to the most recent data, butter prices have varied by only10% and butterfat prices have gained just 13%.  

Both the cheese price and the butterfat price are used to calculate the milk protein price.  Estimated milk protein prices have increased by 93% in just 5 weeks based on the weekly Agricultural Marketing Services (AMS) commodity prices. 

The data published in the blog is based on very current data released today.  


Cheese prices as used in both the AMS and the Chicago Mercantile Exchange (CME) are based exclusively on cheddar cheese prices.

Below are the AMS block cheese prices for cheddar cheese over the last 14 weeks.  The price increase is amazing.  Will it continue?  When prices go up that fast, they then usually “take a breather.” 

Chart I - Block Cheese Prices

To further confirm the increase in cheese prices the futures prices shown in Chart II have also increased from a range around $1.31 per pound to $2.03 per pound, a 55% increase. over the last 8 weeks.  The current price for August 23 closing is $1.95 per pound.

Chart II - CME Future Prices
As covered in the August 13 post to this blog, cheese inventories continue to fall.   As inventories fall, prices go up.  That is happening right now.
Butterfat prices have increased as mentioned above, but the increases are much smaller than the increased cheese prices.  
Chart III - Butterfat Prices

The formulas used to calculate the protein prices are based on the formula below.  When cheese prices go up, milk protein prices go up. When butterfat prices go up, it reduces the price of milk protein.  However, the recent increases in butterfat have been too small to have much impact on milk protein prices.

Protein Price = ((Cheese Price – 0.2003) x 1.383) 

+ ((((Cheese Price – 0.2003) x 1.572) – Butterfat Price x 0.9) x 1.17) 

The below prices for protein are estimates based on the weekly AMS survey prices.  The cheese price used is a blend of block and barrel cheese prices.  The protein prices are not posted anywhere, but they can be calculated from the weekly data by the above formula.

Chart III - Cheese Inventory and the Class III Milk Price
What is the impact on producer protein prices?  Everyone in the component system that has some Class III milk in their mix will benefit.  If cheese was at the futures prices, of around $2.00 per pound, milk protein would be worth over $3.00 per pound. CME butter futures closed today at $2.71 per pound so AMS butterfat would be worth $3.09 per pound, only slightly more than milk protein.
It’s time to start working to increase protein in milk to a higher level.  It can be done!


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