The USDA World Agricultural Supply and Demand Estimate (WASDE) reduced production forecasts for 2019 and 2020 based on a smaller national dairy herd and slower growth in milk production per cow. The 2019 all milk price is forecasted at $18.30/cwt, up from the $18.20 forecast released last month. The all milk price for 2020 is forecasted at $18.80, down a nickel from last month.
In general, forecasts for imported products were raised for 2019 and 2020, based mostly on increased demand for imported butter. On the other hand, export forecasts for 2019 and 2020 are generally lower due to lower demand for nonfat dry milk and increased global competition.
For 2019, cheese, butter and whey price forecasts are raised which is a driver for higher Class III price projections. The lower nonfat dry milk prices are pushing down Class IV projections for the rest of the year. Into 2020, price forecasts for cheese, butter and nonfat dry milk are lowered from last month, which caused the Class III and Class IV price projections for 2020 to fall.