Milk Prices > Predicted Mailbox Prices (Wisconsin)

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Predicted Data

Month Class III Class IV Mailbox
Sep 2016 16.39 14.25 17.26
Oct 2016 14.82 13.66 16.69
Nov 2016 16.76 13.76 18.36
Dec 2016 17.10 15.04 18.86
Jan 2017 16.68 15.53 18.39
Feb 2017 16.88 15.92 18.62
Mar 2017 17.01 16.10 18.76
Apr 2017 17.00 16.50 18.29
May 2017 17.05 16.65 18.36
Jun 2017 17.25 16.92 18.57
Jul 2017 17.48 17.27 18.67
Aug 2017 17.60 17.29 18.78
Sep 2017 17.65 17.47 18.85
Oct 2017 17.47 17.42 19.55
Nov 2017 17.30 17.31 19.39

The Mailbox Price was regressed on the Class III and Class IV price from 2001-01-01 to 2016-08-01. Then, the Mailbox price is predicted using the formula:

Mailbox Price = 1.859 + 0.855 (Class III Price) + 0.158 (Class IV Price) -0.188 (Q1) -0.713 (Q2) -0.864 (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 Nov 2016, and the Class III Futures Settle Price and Class IV Futures Settle Price henceforth.

Regression Statistics

R2 = 0.9867, Adjusted R2 = 0.9864.
  Intercept Class III Class IV Q1 Q2 Q3
Coefficient 1.859 0.855 0.158 -0.188 -0.713 -0.864
Standard Error 0.152 0.019 0.019 0.089 0.088 0.088