WASDE Forecast Milk Production Up; Price Down

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.

WASDE Report For August 2017

The milk production forecasts for 2017 and 2018 are reduced from the previous month as slow growth in milk per cow more than offsets increases in dairy cow numbers. For 2017, fat basis exports are raised from the previous month on higher butter and anhydrous milk fat shipments. Fat basis imports are unchanged.

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New WASDE Report Available

The May 10th World Agricultural Supply and Demand Estimates (WASDE) report presents USDA’s initial assessment of U.S. and world crop supply and demand prospects and U.S. prices for 2017/18. The report included the first calendar-year 2018 projections of U.S. livestock, poultry, and dairy products.

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World Agricultural Supply and Demand Estimates for April

The milk production forecast for 2017 is lowered as reductions in milk per cow offset increases in milk cow numbers. Fat basis imports are reduced on weaker imports of cheese and butterfat products, but imports of milk protein products support a higher
skim-solids basis import forecast. Fat basis exports are lowered on weaker sales of whole milk powder (WMP), but skim-solids basis exports are raised as weaker WMP is more than offset by higher sales of a number of skim-based products.
Ending stock forecasts are raised on both a fat and skim-solids basis, reflecting current large supplies and lower expected domestic use.
Dairy products price forecasts for cheese, butter, nonfat dry milk, and whey are lowered as both domestic and international supplies are large. As a result both Class III and Class IV price forecasts are reduced from last month. The all milk price for 2017 is lowered to $17.40-$17.90 per cwt.
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