USDA Lowers Milk Prices, Raises Milk Production Estimates
In their Tuesday World Agriculture Supply and Demand Estimates report, USDE bumped the milk production forecast for 2020 on a higher expected cow inventory.
The agency raised the 2020 fat basis import forecast from the previous month on recent trade data and stronger anticipated imports of cheese and butterfat products. The fat basis export forecast is reduced on slower expected demand in the first half of the year.
On a skim-solids basis, USDA raised the import forecast on stronger imports of cheese, milk proteins, and several other dairy products. “The skim-solids basis export forecast is raised on expectations of continued strength in international demand,” they noted.
Annual product price forecasts for cheese, butter, and nonfat dry milk (NDM) are lowered from the previous month. However, the whey price forecast is raised.
As a result, USDA lowered milk price forecasts across the board. The Class III price is reduced on the lower cheese price forecast, while the Class IV price is reduced on lower butter and NDM price forecasts. The all milk price forecast is lowered from the previous month to $18.25 per cwt.