Milk supply and use estimates for 2022 are adjusted to reflect reported December
production, ending stock, and trade data in the February 8 WASDE report.
For 2023, milk production is forecast lower as weaker milk prices are expected to result in
lower cow inventories. The Cattle report estimated that the January 1, 2023 dairy cow
inventory was only fractionally above 2022 and that producers were retaining about 2 percent
fewer heifers for addition to the dairy herd. Output per cow is also reduced slightly. On both
fat- and skim-solids bases, imports for 2023 are raised on higher cheese and milk protein
containing products, while exports are reduced on lower sales of skim milk powder, cheese,
and several other products.
Prices were lowered for cheese as stocks remain relatively large and domestic demand is
expected to remain generally soft. Butter prices were unchanged as higher early-year prices
are offset by weaker prices later in the year. Nonfat dry milk powder and whey prices were
lowered on expectations of increased export competition and somewhat softer international
demand. Both Class III and Class IV prices were lowered from last month, reflecting lower
product price forecasts, and the all milk price is reduced to 20.70 per cwt.