Milk Prices > Predicted Mailbox Prices (Wisconsin)

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Predicted Data

Month Class III Class IV Mailbox
Apr 2015 15.81 13.51 16.72
May 2015 16.19 13.91 17.11
Jun 2015 16.72 13.90 17.56
Jun 2015 16.72 13.90 17.56
Jul 2015 16.33 13.34 17.00
Aug 2015 15.99 12.98 16.65
Sep 2015 16.14 13.12 16.80
Oct 2015 16.15 13.42 17.75
Nov 2015 16.10 13.39 17.70
Dec 2015 15.95 13.16 17.53
Jan 2016 15.55 13.25 17.02
Feb 2016 15.45 13.61 17.00
Mar 2016 15.45 13.68 17.01
Apr 2016 15.49 13.59 16.46
May 2016 15.84 13.97 16.82
Jun 2016 16.21 14.35 17.20

The Mailbox Price was regressed on the Class III and Class IV price from 2001-01-01 to 2015-03-01. Then, the Mailbox price is predicted using the formula:

Mailbox Price = 1.810 + 0.849 (Class III Price) + 0.166 (Class IV Price) -0.189 (Q1) -0.754 (Q2) -0.887 (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 Jun 2015, and the Class III Futures Settle Price and Class IV Futures Settle Price henceforth.

Regression Statistics

R2 = 0.9884, Adjusted R2 = 0.9881.
  Intercept Class III Class IV Q1 Q2 Q3
Coefficient 1.810 0.849 0.166 -0.189 -0.754 -0.887
Standard Error 0.150 0.020 0.019 0.090 0.091 0.091