USDA reduces 2023 milk production, price projections
The USDA’s February World Ag Supply and Demand Estimates report provides updated production and price forecasts.
The USDA’s monthly World Ag Supply and Demand Estimates (WASDE) report, released Feb. 8, reduced both 2022 and 2023 U.S. milk production estimates from last month, but also cut 2023 price projections.
At 226.6 billion pounds, estimated milk production for 2022 was lowered 200 million pounds from last month. Final 2022 production was up just 300 million pounds (0.13%) from 2021 and up less than 1.5% from 2020.
The 2022 annual average Class III price was $21.94 per hundredweight (cwt), the Class IV price was $24.47 per cwt, and the 2022 all-milk price was $25.55 per cwt.
At 228.3 billion pounds, the 2023 production estimate was lowered by 900 million pounds from last month’s forecast, with a smaller expected average cow inventory for the year and a subdued increase in milk production per cow. If realized, 2023 production would be up about 0.8% from 2022.
For 2023, the price forecasts for all components were lower with expectations of weak domestic demand and price pressure in international markets. Compared to earlier estimates, the projected 2023 Class III price was reduced another 95 cents to $17.90 per cwt, while the Class IV price forecast was cut $1 to $18.25 per cwt. The projected 2023 all-milk price was reduced 90 cents to $20.70 per cwt.
Beef production, price outlook
For 2023, the beef production forecast was raised from last month. First-quarter slaughter estimates were raised, but that was partly offset by lower carcass weights as cow slaughter is expected to be larger than previously forecast. With lower fourth-quarter 2022 placements, second quarter 2023 steer and heifer slaughter estimates were lowered. Lower fed cattle slaughter, coupled with lower average carcass weights, more than offsets higher expected cow slaughter.
For 2023, projected cattle prices were raised on expected strength in first-half demand for fed cattle in the face of tightening feedlot numbers. Potentially affecting cull cow prices, the fed cattle price forecast for 2023 was estimated at $159 per cwt, up 50 cents last month’s forecast. Highest average prices were forecast for the fourth quarter of the year.
Feed price, production forecasts
The WASDE report also provided potential insights into dairy feedstuff supplies and prices:
Corn: This month’s 2022-23 U.S. corn outlook called for less corn used for ethanol and larger ending stocks. At $6.70 per bushel, the projected season-average corn price received by producers was unchanged from last month’s forecast but is up 70 cents (12%) from the 2021-22 average of $6 per bushel and about $2.17 (48%) more than 2020-21 average of $4.53 per bushel.
Soybeans: The 2022-23 U.S. soybean supply and use outlook called for lower soybean crush and higher ending stocks. The U.S. season-average soybean price received by producers for 2022-23 was forecast at $14.30 per bushel, up 10 cents from last month’s projections and up $1 from 2021-22 and $3.50 more than the 2020-21 average.
The 2022-23 soybean meal price was projected at $450 per ton, up $25 from last month’s forecast and up about $10 from the $440 per ton average in 2021-22.
February 8, 2023