WASDE: All Milk Price Forecast Bumped Higher
In their August World Supply and Demand Estimates (WASDE) report, USDA bumped the 2018 and 2019 all-milk price forecasts higher. The all-milk price estimate is $16.10 to $16.30 per cwt for 2018, and $16.45 to $17.45 per cwt for 2019.
USDA expects total milk production for 2018 to be unchanged from last month but increased their estimate for 2019 based on “slightly higher” cow numbers and increased milk per cow.
“For 2018, fat basis exports are raised from the previous month on higher sales of butter and other fat-containing products,” the report said. “The fat basis import forecast is also raised on higher expected imports of butterfat products.”
USDA lowered their expectations for skim-solids based exports due to weaker sales of nonfat dry milk and Chinese tariffs on lactose and other dairy products.
“For 2018, cheese, butter, NDM and whey price forecasts are raised for 2018,” the report said. “Prices for cheese, NDM and whey are also raised for 2019 as demand strength is expected to carry into next year. However, the 2019 butter price forecast remains unchanged from the previous month.”
USDA raised 2018 Class III and Class IV price forecasts to reflect higher product prices.
“For 2019, Class III price forecast is raised on higher forecast cheese and whey prices,” the report said. “The Class IV price forecast is raised on the stronger forecast NDM price.”