WASDE: A Mixed Bag for Dairy Prices
USDA released their March WASDE report this week. The report showed a mixed bag for dairy prices with some product categories moving higher and some lower. The all milk price for 2017 is forecast at $17.80 to $18.40 per cwt.
The agency’s milk production forecast for 2017 is raised because USDA speculates cow numbers will increase rapidly. However, the report also showed milk per cow declining based on January data.
Dairy exports for 2017 are left unchanged on a fat basis, while skim solids basis are lowered on expected strong competition in world markets. Imports are unchanged.
The cheese price forecast is reduced. The agency cites large stocks and anticipated pressure on prices as the reason. The whey price is forecast was increased. Meanwhile, the Class III milk price was increased as the agency anticipates strength in whey markets to overcome weakness in the cheese market.
The butter price forecast was also raised. However, nonfat dry milk prices were lowered on the agency’s expectation of slower export growth. Therefore, the Class IV price forecast was lowered, reflecting a weaker nonfat dry milk price, which they expect to more than offset the higher butter price forecast.