Milk prices are forecast in the $17-$19 range for this year and next.
USDA left its forecast for 2013 U.S. milk production unchanged but slightly lowered next year’s milk output on expectations of lower dairy profitability, today’s World Agricultural Supply and Demand Estimates (WASDE) reported.
Relatively weak milk-to-feed ratios in the third and fourth quarter of 2013 are expected to slow production growth in the first half of 2014, the report noted.
Even so, the latest estimates still put expected U.S. milk production at record large numbers. 2013 U.S. milk production is projected at 201.8 billion pounds, while next year’s output is pegged at 204.5 billion pounds, down about 1 million pounds from May’s WASDE report.
Fat basis exports for 2013 were projected lower based on slow butter exports through April. USDA raised estimates for skim-solid exports on expectations of continued robust nonfat dry milk (NDM) exports. Fat and skim basis exports for 2014 were unchanged. Fat basis imports are raised for 2013 and 2014.
USDA lowered forecasts for 2013 cheese and butter prices from last month, reflecting greater stocks and weaker-than-expected prices to date. The NDM price was raised on tightening supplies and expectations of continued robust export demand. USDA also narrowed the price range for whey.
As a result of the lower cheese price forecast, the 2013 Class III price outlook was reduced to $17.80-$18.20 per cwt., just slightly below May’s forecast. The Class IV price forecast dropped to $18.15-$18.65 per cwt., down a little as lower butter prices more than offset higher NDM.
For 2014, the butter price forecast was lowered as stocks remain high, but other product prices are unchanged. The Class III price forecast was unchanged at $17.00-$18.00 per cwt., but the Class IV price was lowered about 5 cents per cwt. to $17.75-$18.85 per cwt.
The All Milk price is forecast at $19.60-$20.00 per cwt. for 2013 and $18.95-$19.95 for 2014.