WASDE Lowers Class III Projections

The WASDE report released on May 12 saw the 2023 milk production forecast lowered from the previous month. Cow inventories are raised but growth in milk per cow is slower. Fat-basis exports are lowered from the previous month, mainly on weaker butter and milk fat shipments, offset by stronger cheese.

The skim-solids basis export forecast is higher on stronger skim milk powder and cheese exports, but partly offset by weaker whey exports. Imports on a skim-solids basis are lowered from last month on lower milk protein imports.

Imports on a fat basis are unchanged. Butter and NDM prices are raised from last month on strong demand, while cheese and whey prices are lowered.

Based on the changes in component prices, Class III prices are lowered while Class IV prices are raised. The 2023 all milk price is forecast at $20.50 per cwt.

Milk production for 2024 is forecast above 2023, driven by gains in milk per cow and an additional
milking day. Commercial exports on both fat and skim-solids bases are forecast higher than 2023. Gains are expected in butter and milk fat products, non-fat dry milk (NDM), cheese, whey, and

Imports are projected unchanged on a fat basis but higher on a skim-solids basis, with
higher imports of cheese, milk proteins, and several other dairy products offset by lower butter fat

The Class III price is forecast lower on weaker whey prices. The Class IV price is forecast lower as well, with prices for butter and non-fat dry milk projected lower. The 2024 all milk price is forecast at $19.90 per cwt

The 2023/24 U.S. corn outlook is for larger production, greater domestic use and exports, and higher ending stocks. The season-average farm price is projected at $4.80 per bushel, down $1.80 from 2022/23.

The 2023/24 outlook for U.S. soybeans is for higher supplies, crush, and ending stocks, and lower exports compared with 2022/23. Soybean and product prices are all forecast lower for 2023/24. The 2023/24 U.S. season-average soybean price is forecast at $12.10 per bushel compared with $14.20 per bushel in 2022/23.
Soybean meal prices are forecast at $365 per short ton, down $90. Soybean oil prices are forecast
at 58 cents per pound, down 6 cents from 2022/23.

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