USDA Forecasts Lower U.S. Milk Production for 2011

August 12, 2011 10:14 AM

Recent high temperatures and high-priced feed expected to constrain growth in per-cow milk.

Source: USDA WASDE report
Kees de Jong 10 10 019   CopyUSDA lowered its U.S. milk production forecast for 2011 in its World Agricultural Supply and Demand Estimates released Aug. 11.  
Although the July Cattle report indicated that producers are holding relatively large numbers of dairy replacement heifers, which supports a higher forecast dairy herd, recent hot, humid weather and relatively high priced feed may constrain the growth in milk per cow, USDA noted.
Milk production is forecast higher for 2012, reflecting a larger herd in the first part of 2012 but slightly slower growth in milk per cow.
USDA also raised its All-Milk price forecast to $20.30 to $20.50 per cwt. for 2011, and $17.80 to $18.80 per cwt. for 2012.
Commercial exports for 2011 are forecast higher on the strength of butterfat exports. The report lowered imports estimates, reflecting lower imports of cheese and milk proteins. Trade forecasts for 2012 are unchanged.
Cheese, butter, and whey prices are forecast higher for 2011, but nonfat dry milk (NDM) is forecast lower. Tighter milk supplies are expected to support higher product prices but softening international prices will likely weigh on U.S. NDM markets.
USDA raised its estimate for the Class III price, based on higher forecast cheese and whey prices. Lower forecasted NDM prices, however, will outweigh higher butter prices, and the Class IV price forecast is reduced, USDA said.
For 2012, NDM prices are forecast lower on expected weaker early-year demand, but cheese prices are forecast slightly higher. Forecast butter and whey prices are unchanged from last month.
The Class III price is raised reflecting higher forecast cheese prices, but lower NDM prices result in a reduced forecast for the Class IV price.

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