USDA’s World Agricultural Supply and Demand Estimates (WASDE) report, released July 11, lowered the milk production forecast for 2014 from last month as slower growth in output per cow more than offsets a more rapid expansion in cow numbers. The forecast for 2015 is raised as higher milk prices and lower feed costs are expected to support more rapid growth in cow numbers and output per cow. Although USDA lowered its 2014 U.S. milk production estimate slightly from last month, its new forecast of 205.9 billion pounds still would be a record high. If U.S. dairies achieve USDA’s latest projection, released in Friday’s World Agricultural Supply and Demand Estimates (WASDE) report, their output would soar 4.7 billion pounds over 2013’s level. That’s close to what Arizona produces in an entire year. It would also exceed 2012’s milk production figure of 200.5 billion pounds by 5.4 billion pounds.
Export forecasts for 2014 are lowered on a fat basis but raised on a skim-solids basis. High domestic butter prices are expected to limit export opportunities, but nonfat dry milk/skim milk powder (NDM/SMP) exports are expected to remain strong. For 2015, no change is forecast to fat-basis exports, but strength in NDM/SMP sales will help support higher skim-solids exports.
Dairy price forecasts
Estimated Forecast
Product 2013 2014 2015
Class III ($/cwt) 17.99 21.00-21.30 16.95-17.95
Class IV ($/cwt) 19.05 21.95-22.35 18.70-19.80
All milk ($/cwt) 20.05 23.25-23.55 19.75-20.75
Cheese ($/lb.) 1.7683 2.0300-2.0600 1.6700-1.7700
Butter ($/lb.) 1.5451 1.9650-2.0250 1.6500-1.7800
NFDM ($/lb.) 1.7066 1.8350-1.8650 1.6050-1.6750
Dry whey (¢/lb.) 0.5902 0.6350-0.6550 0.5500-0.5800
Source: USDA WASDE report, July 11, 2014
