Milk Prices > Predicted Mailbox Prices (Wisconsin)

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Predicted Data

Month Class III Mailbox
Mar 2012 15.72 17.28
Apr 2012 15.72 16.74
May 2012 15.22 16.27
Jun 2012 15.44 16.48
Jul 2012 15.65 16.59
Aug 2012 15.96 16.88
Sep 2012 16.17 17.08
Oct 2012 16.14 17.80
Nov 2012 15.99 17.65
Dec 2012 15.89 17.56
Jan 2013 15.64 17.20
Feb 2013 15.45 17.02
Mar 2013 15.55 17.12
Apr 2013 15.51 16.54

The Mailbox Price was regressed on the Class III price from 2001-01-01 to 2012-02-01. Then, the Mailbox price is predicted using the formula:

Mailbox Price = 0.951 (Class III Price) -0.118 (Q1) -0.652 (Q2) -0.745 (Q3) +2.445

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 price, we use the Announced Class III Price until Apr 2012, and the Class III Futures Settle Price henceforth.

Regression Statistics

R2 = 0.9825, Adjusted R2 = 0.9824.
  Class III Q1 Q2 Q3 Intercept
Coefficient 0.951 -0.118 -0.652 -0.745 2.445
Standard Error 0.011 0.101 0.102 0.101 0.179