WASDE Lowers Milk, Product Price Forecasts
The latest USDA World Agriculture Supply and Demand Estimate (WASDE) validates what the market has seen over the past few weeks - inventories are high and global competition is growing.
USDA price forecasts for 2017 for butter, nonfat dry milk (NDM) and whey prices all dropped from last month, leaving cheese as the only product price forecast to increase. Looking ahead to 2018, the WASDE forecast shows a price decrease for all product prices due to larger supplies and global competition.
The WASDE report cited the tug of war between whey (lower) and cheese (higher) prices as the reason to leave 2017 Class III prices unchanged. The Class IV price forecast is reduced from last month based on the lower price forecasts for butter and NDM. The lower product prices forecasted for 2018 are pushing Class III and IV prices lower as well.
Milk production in 2017 and 2018 is expected to slow down due to lower production per cow and slightly lower cow numbers.
The 2017 all milk price forecast is reducted to $17.65 to $17.75 per cwt and the 2018 price is lowered to $16.90 to $17.80 per cwt.