WASDE Continues To Raise Price, Production Forecasts
The USDA World Agriculture Supply and Demand (WASDE) report for September raised milk production forecasts for the balance of 2019 due to growth in milk per cow, which the report suggests will offset lower cow numbers. Production for 2020 is reduced based on a slower regrowth of the milk herd which will not be offset by higher production per cow.
Prices for cheese, nonfat dry milk and whey are raised for 2019 and 2020, leading to a higher Class III projection. The forecasted price for butter is reduced, which is a driver in the reduction of the forecasted Class IV price for 2019 and 2020. The 2019 all milk price is raised to $18.35, and to $18.85 for 2020.
Both fat and skim-based product exports are reduced based on weaker global demand for butterfat and other dairy products.