The All-Milk price is forecast at $19.00-$19.90 per cwt. for 2013.
USDA lowered its forecast for the nation's 2012 milk production in its World Agricultural Supply and Demand Estimates (WASDE) report released Oct. 11.
Slower growth in milk per cow more than offsets a slower expected decline in cow numbers, the WASDE report said. USDA projects 2012 U.S. milk production to reach 199.6 billion pounds, down from September’s forecast of 199.9 billion pounds but still up from 2011’s 196.2 billion pounds.
Higher forecast milk prices in late 2012 and into 2013 are expected to slow the rate of decline in cow numbers and help support higher growth in milk per cow in 2013. That led USDA to raise its milk production forecast for 2013. U.S. milk output is expected to reach 199.7 billion pounds by October 2013, USDA said.
Dairy imports are projected higher for both 2012 and 2013. Dairy exports for 2013 remain unchanged, USDA said.
USDA projected product prices higher for 2012 and 2013 as recent strength in dairy product demand is expected to carry into next year. Forecasts for butter, cheese, nonfat dry milk and whey were also raised.
With higher product prices, USDA raised forecasts for both the Class III and Class IV price. The All-Milk price is forecast at $18.50 to $18.60 per cwt. for 2012 and $19.00 to $19.90 per cwt. for 2013.