USDA Lowers Milk Production, Ups Most Product Price Forecasts
The U.S. milk production forecasts for 2023 and 2024 are lowered from last month, to 227.5 billion pounds and 230.4 billion pounds, respectively, reflecting lower cow inventory reported in the recent Milk Production report. The reduction in cow numbers is expected to continue through 2023 and into the first half of 2024 as returns remain under pressure, says USDA in its latest World Agricultural Supply and Demand Estimates report released September 12. For 2023, output per cow is forecast to increase at a lower rate than previously expected on recent data and the expected impact of high temperatures during the summer, USDA notes. However, the forecast of milk per cow for 2024 is unchanged.
Trade Trends: Imports And Exports
Fat basis import forecasts for 2023 and 2024 are lowered, largely driven by recent trade data and lower expected imports of cheese and butter throughout the forecast period, the report says. Skim-solids basis imports are unchanged for 2023 and 2024. Fat basis export forecasts are unchanged for 2023, while skim-solids basis export forecasts are lowered on weaker whey exports. For 2024, exports on a fat basis are lowered on expectations of fewer shipments of butter, fat-containing products and cheese, while exports on a skim-solids basis are reduced, reflecting lower cheese, whey and whey products shipments.
Price Trends For Dairy Products
For 2023, forecasts for cheese, butter and whey prices are raised — to $1.810 per pound, $2.540 per pound and $0.345 per pound, respectively — on current price strength, but nonfat dried milk (NDM) is lowered to $1.160 per pound, USDA says. Both Class III and Class IV prices are raised, reflecting changes in their component values. For 2024, price forecasts for cheese, butter and whey are raised — to $1.845, $2.550 and $0.315 per pound, respectively — on lowered milk production and continued firm demand. NDM price forecasts are lowered to $1.090 per pound. The Class III price forecast is raised on higher cheese and whey prices while the Class IV price forecast is raised as the higher butter price more than offsets the lower NDM price. The 2023 all milk price forecast is raised to $20.40 per hundredweight, and the 2024 all milk price is raised to $20.30 per hundredweight, according to the report.
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Source: Cheese Market News
