WASDE Lowers Milk Production Forecast; Raises All Milk Price Forecast

For 2019, The March 8 World Agricultural Supply and Demand Estimates lowered the milk production forecast on smaller expected dairy cow numbers.

The fat basis export forecast is reduced on slower expected sales of butterfat due to increased global competition. Skim-solids basis exports are lowered on expected strong competition in international skim milk powder markets and slower expected demand for whey products. The fat basis import forecast is lowered slightly while the skim-solids basis import forecast is unchanged. Annual product price forecasts for cheese, butter, nonfat dry milk (NDM) are raised from the previous month, but the whey price forecast is reduced slightly. The Class III price is raised as the higher cheese price projection more than offsets the lower whey price. The Class IV price is increased on higher forecast butter and NDM prices. The all milk price forecast is raised to average $17.00 to $17.60 per cwt.

Beef production is reduced from the previous month on the pace of fed cattle slaughter in the first quarter and lower expected marketings in mid-2019. Partly offsetting the lower fed cattle slaughter is higher expected cow slaughter.The 2019 beef, broiler, turkey, and egg trade forecasts are unchanged from the previous month. Cattle price forecasts are raised for 2019 on current price strength and expectations of firm demand throughout the year.

Corn exports are reduced 75 million bushels to 2.375 billion, reflecting diminished U.S. price competitiveness and expectations of increased exports for Brazil and Argentina. With no other use changes, ending stocks are raised 100 million bushels to 1.835 billion. The season-average corn price received by producers is lowered 5 cents at the midpoint to $3.55 per bushel.

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