USDA Lowers 2021 All Milk Price Projection
December 10, 2020
In their December World Agriculture Supply and Demand Estimates (WASDE) report released on Thursday, USDA cited a decline in dairy product prices as the driver to reduce the agency’s 2021 all milk price forecast.
USDA noted weaker demand expectations and large supplies would pressure cheese and butter prices lower in 2021. They did push price expectations for nonfat dry milk and whey prices higher. Still, for 2021, forecasts of both Class III and Class IV are reduced from last month on weaker prices for cheese and butter respectively. The 2020 all milk price is unchanged at $18.25 per cwt; the 2021 all milk price is lowered to $16.60 per cwt.
USDA expects farmers to increase their herd sizes next year and raised the 2021 milk production forecast based on higher cow numbers. Conversely, the agency expects fat basis exports to increase and imports to decrease. USDE left the skim-solids basis import forecast is unchanged but raised the export forecast on larger shipments of nonfat dry milk powder and dry whey products.