WASDE Report For August 2017

The milk production forecasts for 2017 and 2018 are reduced from the previous month as slow growth in milk per cow more than offsets increases in dairy cow numbers. For 2017, fat basis exports are raised from the previous month on higher butter and anhydrous milk fat shipments. Fat basis imports are unchanged.

The skim-solid basis export forecast for 2017 is lowered on weaker than expected whey sales. The import forecast is unchanged. For 2018, fat basis exports are raised on stronger shipments of a number of dairy products. Fat basis imports are lowered slightly. Skim-solid basis exports are raised on expected stronger sales of nonfat dry milk (NDM) and other dairy products while imports are unchanged from last month.

Butter and cheese price forecasts are raised for 2017 and 2018 as demand strength is expected to carry into 2018. The 2017 and 2018 NDM and whey price forecasts are reduced from the previous month on weak demand.

The 2017 Class III price forecast is unchanged at the midpoint, but the 2018 price is lowered as lower whey prices more than offset higher cheese prices.

Class IV price forecasts for 2017 and 2018 are raised as stronger forecast butter prices more than offset lower NDM prices. The all milk price is raised to $17.80 to $18.00 per cwt for 2017, but is unchanged at $18.00 to $19.00per cwt for 2018.

U.S. corn outlook is for lower supplies, reduced feed and residual use and exports, and a decline in ending stocks. Corn production is forecast at 14.2 billion bushels, down 102 million from the July projection. The season’s first survey-based corn yield forecast, at 169.5 bushels per acre, is 1.2 bushels lower than last month’s trend-based projection. With supplies falling faster than use, ending stocks are reduced 52 million bushels.

The projected range for the season-average corn price received by producers is unchanged at $2.90 to $3.70 per bushel.

Fed cattle prices are reduced in 2017 and 2018 as current prices have weakened and larger expected supplies of fed cattle are expected to pressure prices. The increase in beef production reflects  relatively large cattle placements in the second quarter which will likely impact fourth quarter cattle slaughter. The beef export forecast is lowered from last month on recent trade data and an expected slowdown in global demand for the remainder of 2017.

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