WASDE Forecasts All Milk Price Over $18
The latest USDA World Agriculture Supply and Demand Estimate (WASDE) forecasts a continued bullish market for dairy producers.
Based on declining milk cow numbers and slow growth in production per cow, the WASDE report lowered its 2019 milk production forecast. The report also predicts higher dairy product exports in both fat and skim-based categories, while leaving imports unchanged to lower.
The reduced production estimate and strong demand helps push cheese and nonfat dry milk prices higher, triggering greater Class III and Class IV prices through 2019. The WASDE report predicts an all-milk price for 2019 at $18.05.
The report also predicts that dairy producers will react to better prices by expanding herd sizes. The milk production forecast was raised for 2020 as was the expected production per cow. The WASDE report also predicts a stronger export market based on a more competitive price point for U.S. products due to slower growth of competitor supplies.
Currently the WASDE report estimates a 2020 all-milk price at $18.80.