Washington—The USDA, in its monthly supply-demand estimates released Thursday, raised its milk production forecasts for both 2021 and 2022 and also raised most of its dairy product price forecasts.
The milk production forecast for 2021 is raised by 600 million pounds from last month, to 228.5 billion pounds, on higher expected cow numbers. That would be an increase of 5.3 billion pounds from 2020’s record output.
The fat basis import forecast is reduced on lower expected imports of butterfat-containing products, while the skim-solids basis import forecast is unchanged.
Exports on both fat and skimsolids bases are raised from last month. Fat basis export increases are underpinned largely by higher shipments of butterfat-containing products and cheese, while skimsolids increases primarily reflect stronger expected cheese, lactose, and whey shipments, USDA said.
Price forecasts for 2021 for butter, nonfat dry milk and dry whey are raised from last month, to $1.7150 per pound, $1.2500 per pound and 59.0 cents per pound, respectively, on recent price strength and stronger anticipated demand. The cheese price is lowered from last month, to $1.7050 per pound, on relatively large stocks and prices.
The lower forecast cheese price results in a lower Class III price, $17.45 cwt, but the higher butter and NDM prices support a higher Class IV price, $15.85 cwt. The all milk price forecast is lowered by 10 cents, to $18.85 per hundred.
The 2022 milk production forecast is raised by 800 million pounds from last month, to 231.1 billion pounds, as higher forecast cow numbers for 2021 carry into 2022. Import forecasts are unchanged. The fat basis export forecast is unchanged, but the skim-solids export forecast is increased on expected strength in whey exports.
For 2022, butter, NDM, and dry whey price forecasts are raised from last month, to $1.7950 per pound, $1.2200 per pound and 51.0 cents per pound, respectively, while the cheese price is unchanged, at $1.7150 per pound.
Thus, Class III and Class IV price forecasts are raised from last month, to $17.15 per hundred and $15.95 per hundred, respectively. The all milk price forecast is raised to $18.75 per hundred for 2022, up 25 cents from last month.
