Discover why the USDA forecasts higher milk prices in 2024. How will increased production and a growing herd impact the dairy market? Read more to find out.
In its May World Ag Supply and Demand Estimates (WASDE) report, the USDA raised its milk production forecast 2024. This was primarily due to increased dairy cows and more rapid growth in output per cow. The 2024 milk production estimate is now at 227.3 billion lbs., which is 1 billion lbs. higher than last month’s estimate and 900 lbs. more than the 2023 total of 226.4 billion kg.
The USDA also adjusted the milk production estimate for 2025 upwards, citing higher milk per cow predictions and an expanding herd. Production is expected to reach 229.3 billion lbs. next year, or 0.9% higher if realized.
“With increases in the number of products, commercial exports are expected to grow on both a fat and skim-solids basis. Imports for fat and skim-solids are forecasted lower as domestic use is predicted to increase on a fat and skim-solids basis,” according to the USDA report.
Butter price forecasts for 2024 have moved slightly upwards, now at $2.935 per lb, a 1 cent increase. Cheese prices also saw an upward adjustment, with estimates climbing to $1.695, up 7.5 cents.
Due to higher cheese prices raised the Class III price forecast to $16.75 per cwt., up 55 cents from last month’s prediction. However, Class IV prices dipped by 15 cents to $20.25 per cwt. However, they remain higher than the 2023 Class IV price of $19.12.
The all-milk price forecast for 2024 has been increased to $21.20 per cwt., up 30 cents from April and 81 cents higher than the 2023 figure. Looking ahead, the all-milk price prediction for 2025 is $20.90 per cwt.
