WASDE Predicts Milk Price Up, But Margins Tighten

The USDA World Agricultural Supply and Demand Estimates were released on February 9.

The 2021 milk production, trade, and stock estimates are adjusted to reflect December data. For 2022, the milk production forecast is lowered from last month, on lower dairy cow numbers. The Cattle report estimated the dairy cow inventory on January 1 almost one percent below 2021, and the number of heifers held for dairy cow replacement was three percent lower.

The 2022 fat basis import forecast is raised on higher expected imports of butter, while exports are reduced on lower expected shipments of butter and cheese. On a skim-solids basis, the import forecast is raised, reflecting higher imports of milk proteins and several other dairy-containing products while the export forecast is reduced on weaker expected sales of whey products and skim milk powder.
Annual product price forecasts for cheese, butter, nonfat dry milk, and whey are raised from the previous month on current prices, lower expected milk production, and tightening stocks.

With higher product prices, both the Class III and the Class IV prices are raised. The 2022 all milk price forecast is increased to $23.55 per cwt.

This month’s 2021/22 U.S. corn supply and use is unchanged relative to last month. The season-average farm price remains at $5.45 per bushel. Global coarse grain production for 2021/22 is projected 2.7 million tons lower to 1,497.4 million. This month’s foreign coarse grain outlook is for lower production and consumption, and smaller ending stocks relative to last month.

OILSEEDS: This month’s 2021/22 U.S. soybean outlook is for increased soybean crush and lower ending stocks. Soybean crush is forecast at 2.215 billion bushels, up 25 million from last month on favorable crush margins and improving prospects for soybean
meal exports.

The U.S. season-average soybean price for 2021/22 is forecast at $13.00 per bushel, up 40 cents from last month partly reflecting the impact of drought in South America.

The soybean meal price is forecast at $410.00 per short ton, up 35 dollars. The soybean oil price forecast is raised 1 cent to 66.0 cents per pound

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