Milk Prices > Predicted Mailbox Prices (Wisconsin)

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Predicted Data

Month Class III Class IV Mailbox
Sep 2014 24.60 22.58 25.46
Oct 2014 23.82 21.35 25.45
Nov 2014 21.94 18.21 23.34
Dec 2014 17.77 16.58 19.58
Jan 2015 16.23 14.85 17.80
Feb 2015 15.56 14.48 17.18
Mar 2015 15.15 14.16 16.78
Apr 2015 15.03 14.34 16.19
May 2015 15.34 14.57 16.49
Jun 2015 15.74 14.69 16.84
Jul 2015 15.80 15.30 16.85
Aug 2015 16.03 15.77 17.13
Sep 2015 16.47 16.15 17.56
Oct 2015 16.57 16.25 18.53
Nov 2015 16.35 16.35 18.36

The Mailbox Price was regressed on the Class III and Class IV price from 2001-01-01 to 2014-08-01. Then, the Mailbox price is predicted using the formula:

Mailbox Price = 1.879 + 0.831 (Class III Price) + 0.177 (Class IV Price) -0.194 (Q1) -0.716 (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 2014, and the Class III Futures Settle Price and Class IV Futures Settle Price henceforth.

Regression Statistics

R2 = 0.9885, Adjusted R2 = 0.9882.
  Intercept Class III Class IV Q1 Q2 Q3
Coefficient 1.879 0.831 0.177 -0.194 -0.716 -0.864
Standard Error 0.148 0.020 0.019 0.089 0.089 0.089