The figure below show average BFP price forecasts of about 300 industry and university dairy economists earlier this month. The light gray area shows the range of the estimates--over $3.00 per cwt this fall. So the consensus is obvious that most of us believe prices will begin to decline, but when and how much are very much in doubt.

Based on this forecast minimum Class I prices in the Carolina order would average over $18.00 in the fourth quarter of 1996, then decline to $16.25 - $16.50 in the spring and summer. High feed prices, poor forage development and continued strong demand continue to dominate the supply-demand situation.

Futures market activity for fluid milk and products is increasing but still is very light. Yesterday on the CSCE, seven milk contracts and six cheese contracts were traded. April milk futures were quoted at $13.90 - $14.25, April cheese at $144, which compares to last week's National Cheese Exchange price of $169.50. This would imply that the markets, like the economists, are predicting a decline in prices.

Those with Internet access can get CSCE quotes from the exchange's home page:

Coffee, Sugar & Cocoa Exchange

It may be time to engage in a little paper trading, but I would be leery of hedging with real money, particularly in the milk futures, until activity picks up and we gain an understanding of how and whether the futures prices relate to the BFP.