Today’s WASDE report indicates cow numbers will fall later this year.
USDA raised its 2012 forecast for milk production and milk cow numbers in its World Agricultural Supply and Demand Estimates (WASDE) report released today. The All-Milk Price projection for 2012 was lowered to $18.00 to $18.70 per cwt.
The report indicated 1% more dairy cows on Jan. 1, 2012. However, producers are holding 1% fewer heifers for addition to the dairy herd, which is expected to push cow numbers lower later in the year.
Milk per cow forecasts were raised on higher-than-expected output in the last quarter of 2011, and mild weather in much of the country is supporting increased early-year yields.
The WASDE report also raised 2011 milk production estimates, reflecting end-of-year production data.
USDA increased fat-basis trade estimates for 2011 due to both stronger-than-expected imports of butter oil and exports of cheese during November. The skim-solids export estimate for 2011 was raised largely on relatively strong November exports of whey and skim milk powders. This strength is expected to carry into this year, thus raising the 2012 skim-solids export forecast as well, USDA said.
With higher forecast 2012 production, cheese and butter prices were lowered. The nonfat dry milk (NDM) price was lowered to reflect slightly weaker early-year prices. With stronger demand projected for whey, USDA raised the whey price forecast. The lower cheese price is expected to more than offset the higher whey price, resulting in a reduced forecast Class III price.
USDA pegged the 2012 Class III price at $16.70 to $17.40 per cwt. Lower butter and NDM prices are expected to result in a lower Class IV price of $16.25 to $17.05 per cwt. The All-Milk Price projection for 2012 was lowered to $18.00 to $18.70 per cwt.