WASDE: USDA Bumps Class III Prices Higher, Reduces Class IV Prices
In their March World Agricultural Supply and Demand Estimates report, USDA delivered a mixed bag of milk price forecasts.
The agency left the all-milk price alone at a range of $15.75 to $16.35, bumped Class III higher on a cheese price increase and lowered Class IV prices on lower nonfat dry milk prices.
The milk production forecast for 2018 is raised from last month on more rapid growth in milk per cow in the first half of the year.
“Annual product price forecasts for cheese and butter are raised from the previous month as recent prices have increased. However, continued large supplies of nonfat dry milk (NDM) are expected to pressure NDM prices, and the forecast is reduced,” USDA says.
Unfortunately for dairy margins, USDA forecasts corn and soybean meal prices to increase. “The projected range for the season-average corn price received by producers is narrowed 10 cents on the low end to $3.15 to $3.55 per bushel, with the midpoint up 5 cents to $3.35 per bushel,” USDA says. Soybean meal prices are projected at $325 to $355 per short ton, up $20.00 at the midpoint. “Higher soybean meal prices reflect the impact of sharply lower soybean production in Argentina,” USDA says.