The All-Milk Price estimate drops to $17.25-$17.75 per cwt.
USDA has raised its 2012 U.S. milk production estimate based on increased milk cow numbers and gains in milk per cow.
In today’s World Agricultural Supply and Demand Estimates (WASDE) report, USDA projected U.S. milk output at 201.1 billion pounds this year, up from 199.7 billion pounds in last month’s forecast. It pegs 2011 milk production at 196.2 billion pounds.
USDA also raised its skim solids import forecast. It reduced the fat-basis export forecast on lower butter exports, but skim solids exports are projected higher on stronger nonfat dry milk sales. Ending stock forecasts are raised on both a fat and skim-solids basis.
With higher forecast 2012 milk production and weaker-than-expected product demand, USDA lowered its price forecasts for cheese, butter, NDM and whey. As a result, both Class III and Class IV price forecasts are reduced from last month. USDA lowered its All-Milk price for 2012 to $17.25-$17.75 per cwt. That’s down from 2011’s All-Milk Price of $20.14 per cwt.