Milk Prices > Predicted Mailbox Prices (Wisconsin)

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Predicted Data

Month Class III Class IV Mailbox
Jan 2018 14.00 13.13 15.75
Feb 2018 13.40 12.87 15.19
Mar 2018 14.22 13.04 15.92
Apr 2018 14.47 13.48 15.67
May 2018 15.24 14.49 16.49
Jun 2018 15.75 15.63 17.10
Jul 2018 16.45 16.09 17.63
Aug 2018 16.80 16.24 17.96
Sep 2018 16.99 16.29 18.13
Oct 2018 16.91 16.31 18.92
Nov 2018 16.73 16.44 18.79
Dec 2018 16.61 16.39 18.68
Jan 2019 16.33 16.06 18.20
Feb 2019 16.26 16.00 18.13
Mar 2019 16.20 16.03 18.08
Apr 2019 16.15 16.10 17.52

The Mailbox Price was regressed on the Class III and Class IV price from 2001-01-01 to 2017-12-01. Then, the Mailbox price is predicted using the formula:

Mailbox Price = 1.860 + 0.863 (Class III Price) + 0.152 (Class IV Price) -0.185 (Q1) -0.717 (Q2) -0.863 (Q3)

where Q1, Q2 and Q3 are 0 or 1 according as whether the price pertains to quarters 1, 2 or 3. For the Class III and Class IV prices, we use the Announced Class III Price and Announced Class IV Price until Apr 2018, and the Class III Futures Settle Price and Class IV Futures Settle Price henceforth.

Regression Statistics

R2 = 0.9859, Adjusted R2 = 0.9856.
  Intercept Class III Class IV Q1 Q2 Q3
Coefficient 1.860 0.863 0.152 -0.185 -0.717 -0.863
Standard Error 0.149 0.019 0.018 0.084 0.084 0.083