July 10, 2020
USDA on Friday pushed their estimates for 2020 and 2021 all milk price forecasts higher. In their World Agriculture Supply and Demand Estimates report, the agency noted the average Class III, Class IV and the all milk price would all be higher than previously estimated this year and next.
“The milk production forecast for 2020 is lowered from last month largely on slower growth in milk per cow,” USDA noted. “However, the 2021 milk production forecast is raised from last month on expectations of dairy herd rebuilding and a recovery in growth in milk per cow.”
For 2020, USDA’s fat basis import forecast is raised from the previous month on higher imports of butter, while the fat basis export forecast is raised on increased shipments of cheese and butterfat products. The skim-solids basis import forecast is unchanged from the previous month, but the export forecast is raised on higher expected exports of dry skim milk products and lactose.
Price forecasts for cheese, butter, and nonfat dry milk are raised from the previous month on recent price strength and anticipated demand strength. The whey price forecast is lowered from last month, the agency noted.
“Class III and Class IV milk prices are raised for 2020, and the all milk price forecast is raised to $18.25 per cwt,” USDA said Friday. “For 2021, the fat basis import and export forecasts are raised. The skim-solids basis import forecast is unchanged, but the export forecast is raised on strong international demand for skim milk powder. For 2021, cheese, butter, and nonfat dry milk price forecasts are raised from the previous month while the whey price is unchanged. The 2021 Class III and Class IV milk price forecasts are raised from last month, and the all milk price forecast is raised to $17.05 per cwt.”