Unkown markets
March 10, 2017

Is The WASDE Milk Price Forecast Inacurate?

 |  By: Anna-Lisa Laca

Each month USDA releases an all-milk price forecast as part of it's World Agricultural Supply and Demand Estimates (WASDE) report. The report, known to shake grain markets, rarely has much of an impact on dairy markets. Could that be because the price forecast isn't very accurate? Last year there only five months that the all-milk price announced by USDA as part of the MPP program fell within the price forecast range announced in the WASDE report for the same month. Those months were January, February, March, April and July. Aside from those five, the actual all-milk price was either higher or lower than the WASDE forecast range.

In 2015, the all-milk price did not fall within the WASDE price forecast range for even one month. While August was close, the all-milk price for that month landed at $16.70 per CWT, five cents short of the minimum price predicted by the USDA in that month's WASDE report. Similarly, the December all-milk price landed five cents higher than the top end of the WASDE forecast in December, landing at $17.20 per CWT.

While the WASDE report is a valuable tool for producers and market analysts alike, maybe it should be taken with a grain of salt.