September 12, 2016

USDA Lowers Milk Prices, Increases Production Forecasts [VIDEO]

 |  By: Anna-Lisa Laca

In already trying times, the last thing producers want to hear is USDA lowering milk prices. Unfortunately, that’s what happened with this morning’s WASDE report. According to the report, USDA estimates the 2016 all-milk price to be $16.10-$16.30 which is down from last month. The 2017 all-milk price estimate stayed the same as last month at $16.15 – $17.15.

Also in bearish news, USDA raised the production forecasts for 2016 (212.2 billion lbs.) and 2017 (216.1 billion lbs.). “The milk production forecast for 2016 is raised from last month, as the cow inventory appears to have steadied in the face of expected improvements in returns,” the report said. “The production forecast for 2017 is raised to reflect slightly more rapid growth in milk per cow.”

USDA also lowered the 2016 and 2017 Class III milk prices in response to the reduction in cheese prices. The Class IV milk price also took a hit moving to a range of $13.65 - $13.95 for 2016 as the result of lower butter prices offsetting the higher non-fat dry milk price. Class IV price forecasts are increased for 2017 to $13.80 - $14.90. USDA expects higher non-fat dry milk prices to “more than offset the lower butter price forecast.”


USDA Lowers Expectations on Cheese, Butter Prices

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