USDA Forecasts Lower 2022 Cheese Prices
USDA forecasts milk production will reach 227.9 billion pounds this year, up 200 million pounds from its forecast last month due to higher cow inventories, according to the latest World Agricultural Supply and Demand Estimates report released Wednesday.
This month’s report also includes forecasts for 2022. USDA forecasts milk production in 2022 to reach 230.3 billion pounds as continued gains in milk per cow more than offset a slight reduction in the dairy cow herd.
Commercial exports in 2021 on a fat basis are forecast at 10.8 billion pounds this month, while 2022 fat basis exports are forecast at 10.3 billion pounds as higher domestic butter prices reduce competitiveness in world markets, USDA says. However, strong global demand and weaker domestic prices for cheese, nonfat dry milk (NDM) and whey are expected to support slightly higher exports on a skim-solids basis, forecast at 50.0 billion pounds in 2022, up from 49.5 billion pounds forecast for 2021.
Fat basis imports this month are forecast at 6.2 billion pounds, up from 6.0 billion pounds last month. For 2022, fat basis imports are forecast lower at 5.9 billion pounds on lower expected imports of butterfat products and cheese, USDA says. Skim-solids basis imports are forecast at 5.5 billion pounds for 2021, up 200 million pounds from last month, and in 2022 are expected to decline to 5.4 billion pounds, mainly on lower cheese imports.
Cheese, NDM and whey prices in 2021 are raised from the previous month, but butter is lowered, USDA says. Cheese now is forecast to average $1.740 per pound, NDM $1.240, whey $0.575 and butter $1.710.
Both Class III and Class IV prices are raised for 2021, to $17.70 and $15.75 per hundredweight, respectively. The 2021 all milk price is forecast at $18.95, up from 18.40 forecast last month.
For 2022, butter prices are forecast higher at $1.790 per pound, but cheese prices are forecast lower at $1.715 as an increased proportion of milk is expected to move into cheese production. NDM and whey prices are lowered, to $1.195 and $0.475, respectively, reflecting competition in international markets, USDA says.
The 2022 Class III price is lowered to $16.85 per hundredweight on weaker cheese and whey prices. The Class IV price is lowered to $15.70 as the lower NDM price more than offsets higher butter prices. The 2022 all milk price is forecast at $18.50 per hundredweight.
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Source: Cheese Market News