Yesterdays WASDE report has milk production forecasts for both 2018 and 2019 lowered from last month on slower than anticipated growth in milk per cow and lower cow numbers. Although tempered by lower expected feed costs, lower milk prices will likely weaken producer margins, resulting in lower cow numbers and slower growth in milk per cow. USDA’s Cattle report, to be released on July 20th, will provide a midyear estimate of dairy cow and dairy replacement heifer inventories.
The World Agricultural Supply and Demand Estimates release June 12 forecast milk production for 2018 down from last month on slightly lower cow numbers and slower expected growth in milk per cow.
The milk production forecast for 2018 is raised from last month on more rapid growth in milk per cow in the first half of the year in the March WASDE report.
The milk production forecast for 2018 is lowered from last month on expectations of slower growth in milk per cow. The 2018 fat basis export and import forecasts are unchanged from the previous month. On a skim-solids basis, the import forecast is raised slightly while the export forecast is raised on strong global demand for skim milk powder, lactose, and whey products. The 2017 production, trade, and stock estimates are adjusted to reflect December data.
The milk production forecast is lowered for 2017 on slower growth in milk per cow. The slower growth in milk per cow is expected to carry into 2018 and combined with an expected slower rate of growth in cow numbers, the 2018 milk production forecast is lowered- that was the good news.
The milk production forecast for 2017 and 2018 was lowered from the previous month on an expected slower pace of growth in milk per cow and slightly lower cow numbers. For 2017, the fat basis import forecast is lowered on recent trade data and the expectation of slower cheese imports in the fourth quarter; the forecast is raised for 2018 on higher expected shipments of whole milk powder and butter.
The World Agriculture Supply and Demand Estimates from USDA this week raised the milk production forecast for 2017 as increases in milk per cow more than offset a slower rate of milk cow expansion. For 2017, fat basis exports is reduced from the previous month on slowing cheese shipments, while fat basis imports are raised on increased purchases of butterfat. On a skim-solids basis, the export forecast for 2017 was lowered on weaker than expected skim milk powder sales, while the import forecast is raised due to stronger demand for a number of dairy products. For 2018, the milk production forecast was reduced from the previous month on slower growth in cow inventories. The annual fat basis export forecast is unchanged from the previous month, but the import forecast was reduced on expected declining cheese imports.
The skim-solids basis export forecast was reduced from the previous month as competition in international powder markets is expected to remain strong; imports are reduced on lower milk protein and cheese shipments.
Butter, NDM, and whey prices are forecast lower for 2017 while cheese prices are forecast higher from the previous month.
The 2017 Class III price is raised as higher forecast cheese prices offset lower whey prices.
The Class IV price is reduced on lower butter and NDM. For 2018, all dairy product prices are reduced, resulting in lower Class III and Class IV product prices.
The all milk price is reduced to $17.70 to $17.90 per cwt for 2017 and $17.75 to $18.55 per cwt for 2018.