Despite greater milk supply, WASDE report estimates higher All-Milk price this year.
U.S. milk production in 2013 is forecast to rise from last month’s projections, largely due to a slower pace of herd reduction and higher first-quarter milk per cow, USDA said March 8 in its World Agricultural Supply and Demand Estimates (WASDE) report.
U.S. milk production in 2013 is forecast at 201.9 billion pounds, up 900 million pounds from the February WASDE report. That projection is 1.6 billion pounds over the 2012 estimated milk output.
Despite the increased milk supply, USDA raised its estimate slightly for the 2013 All-Milk price to the $19.00-$19.60 per cwt. range. It also increased its outlook for Class IV milk by roughly 35 cents per cwt. to $17.35-$18.05, based on expected strength in exports of nonfat dry milk exports.
The WASDE outlook also foresees larger 2013 fat-basis exports on expectations of stronger shipments of butter. Imports remained unchanged on both a fat and skim solids basis.
USDA lowered price projects for cheese and whey on expectations of increased production and moderate demand. The forecast butter price was left unchanged from last month, with a tightened price range. The report estimated a lower Class III price forecast from last month, down slightly to $17.55-$18.15 per cwt., reflecting weaker cheese and whey prices.