January WADSE Report Has 2022 All-Milk Over $25.50 per cwt

Milk production for 2022 is lowered from last month with lower expected milk per cow. The
2023 production forecast is lowered with a smaller expected average cow inventory for the
year; output per cow is unchanged from last month. USDA’s Cattle report, which will be
released January 31, will provide an indication of producer intentions for retaining dairy
heifers for addition to the breeding herd.

Driven by recent trade data, fat basis imports for 2022 are unchanged with offsetting
changes for a number of products, but skim-solids basis imports are raised on expected
demand for milk proteins. Strength in milk protein demand is expected to carry into 2023 and

the forecast for skim-solids imports is also raised. Fat basis imports for 2023 are unchanged.
Exports on a fat basis for 2022 are raised, largely on butter and cheese with stronger
expected butter exports supporting an increased forecast for 2023. Exports on a skim-solids
basis are raised in 2022 on stronger cheese and lactose shipments. The 2023 forecast is
raised on stronger skim milk powder exports.

For 2022, product and Class price estimates are adjusted to reflect reported prices. For
2023, the price forecasts for all components are lower with expectations of weak domestic
demand and price pressure in international markets. Forecasts for Class III and Class IV
prices are lowered. The 2022 all milk price forecast is lowered to $25.55 per cwt and the
2023 all milk price is lowered to $21.60 per cwt.

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