USDA Leaves 2017 All-Milk Price Range Unchanged, Lowers 2018
While many producers were hoping for a seasonal boost in milk prices as we enter the holiday buying season, USDA dampened those hopes with their October 12 WASDE report. USDA forecasts indicate the all-milk price forecast range for the rest of 2017 will stay at $17.75 to $17.85 per CWT. Unfortunately for producers, USDA lowered the 2018 price range to $17.45 to $18.35 per CWT.
The agency expects milk production to increase slightly in 2017 and 2018 on growth in milk per cow, however they don’t expect cow numbers to grow. In fact Thursday’s report shows cow numbers dipping slightly in 2018. “Exports on a fat basis are raised for 2017 on stronger butter and cheese exports, and increased sales of butter and anhydrous milkfat are expected to support higher fat basis exports in 2018,” the report says.
In 2018, continued demand strength for cheese is reflected in a higher price forecast, while butter, NDM, and whey prices are lowered on larger supplies and pressure from international prices, USDA says. The Class III price was raised for the remainder of 2017 on stronger cheese prices but was lowered for 2018 because lower whey prices are expected to offset any growth in cheese prices. Class IV price forecasts were lowered across the board on account of lower forecast butter and NDM prices.
For full WASDE report coverage visit www.agweb.com.