USDA Forecast 2020 Milks Holds At $18.85/cwt

Milk production forecasts for 2019 are raised on higher cow numbers and stronger growth in
milk per cow. For 2020, expected continued gains in milk per cow supported an increase in
the milk production forecast in this weeks WASDE report.
Annual forecasts of imports on both a fat and skims-solids basis are unchanged for 2019
reflecting current trade data, but forecasts for 2020 are lowered as the recently announced
additional tariffs on a number of EU dairy products are expected to result in reduced imports.
Fat basis export forecasts for 2019 and 2020 are reduced from last month on continued
competitive pressure on U.S. cheese exports. The 2019 skim-solids basis export forecast is
lowered on weaker expected exports of cheese and skim and nonfat dry milk (SMP/NDM).
However, increased strength in SMP/NDM sales in 2020 due to strong global demand is
expected to more than offset continued weakness in cheese exports. The 2020 skim-solids
basis export forecast is raised.
For 2019, cheese and NDM prices are raised from the previous month, but price forecasts for
butter and whey are reduced. The Class III price is raised from last month as the higher
cheese price more than offsets the lower whey price; the Class IV price is raised as the
higher NDM price more than offsets the lower butter price. For 2020, cheese and NDM
prices are raised from the previous month, but the price forecast for butter is reduced. The
whey price is unchanged. As a result, the Class III price forecast is higher, but the Class IV
price is lowered, as the higher NDM price is more than offset by the lower butter price. The
2019 all milk price is forecast higher at $18.40; for 2020 the price is unchanged at $18.85 per
cwt.

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