WASDE report forecasts higher dairy prices for next year.
USDA on Friday raised the 2012 milk production forecast on higher estimated milk per cow in the third quarter, but left production forecasts for the remainder of 2012 and 2013 unchanged from last month.
In its November World Agricultural Supply and Demand Estimates report, USDA projected this year’s U.S. milk output at 199.7 billion pounds, compared to 196.2 billion pounds in 2011. It also forecast 2013 milk production at 199.7 billion pounds.
The report forecast the 2012 All-Milk Price at $18.50 to $18.60 per cwt., unchanged from last month, but raised projections for 2013 to $19.10 to $20.00 per cwt.
The report also estimated reduced fat basis exports in both years, largely on lower butterfat exports. But it raised skim solids export forecasts, largely due to whey protein product sales.
Cheese prices are expected to drop in 2012, but the forecast is unchanged for 2013. Projected butter prices for both 2012 and 2013 were lowered as butter stocks were forecast higher than last month. USDA raised its estimate for nonfat dry milk for both years. The whey price forecast was left unchanged for 2012 but raised for 2013.
The report left the Class III price for 2012 unchanged, but lowered projections for the Class IV price forecast on weaker butter prices. For 2013, higher whey and nonfat dry milk prices are expected to push the Class III and Class IV price forecasts higher.