USDA report says high feed costs offsetting high milk prices, only slight herd growth expected.
USDA reduced its 2011 U.S. milk production forecast slightly from last month in its World Agricultural Supply and Demand Estimates (WASDE) released today.
The report projected April’s U.S. milk production at 195.9 billion lb., down from last month’s 196 billion-pound estimate. The WASDE report forecast the all-milk price would average $18.15 to $18.65 per cwt. for 2011. That compares to the 2010 all-milk estimated price of $16.29 per cwt.
Relatively high milk prices are being offset by high feed costs, and only slight growth is expected in the herd for the remainder of the year, USDA noted in the report’s Livestock, Poultry and Dairy segment.
Fat-basis imports are lowered from last month but skim-solids imports are forecast higher. Both skim and fat-basis exports are raised largely on the strength of first-quarter butter, cheese, and nonfat dry milk (NDM) sales.
Butter and cheese prices are forecast lower this month, reflecting recent price declines, but NDM and whey price forecasts are raised. The Class III price forecast is lowered as the weaker cheese price more than offsets higher whey prices. The Class IV price forecast is raised as higher NDM prices more than offset the lower forecast butter price.
Meat supplies remain tight, and improving domestic demand and strength in red meat exports are supporting prices for livestock and poultry, the report said.