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USDA Cuts 2015 Milk Production Forecasts, Most Price Forecasts
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The US Department of Agriculture (USDA), in its monthly supply-demand estimates released Monday, reduced most of its dairy product price forecasts for next year while also lowering its 2015 milk production forecast.
For this year, the milk production forecast is increased by 100 million pounds from last month, to 206.2 billion pounds, as growth in milk per cow is increased.
However, for 2015, the milk production forecast is lowered by 500 million pounds, to 212.3 billion pounds, as the expansion in cow numbers and growth in milk per cow are expected to be more moderate.
Dairy export forecasts for 2014 and 2015 are lowered as US dairy products, especially on a skim solids basis, remain less competitive on world markets.
Cheese and nonfat dry milk prices are raised for 2014, reflecting current price movements, but the price forecasts for 2015 are lowered as domestic supplies are expected to be relatively large. Cheese prices are now projected to average $2.1700 to $2.1800 per pound this year and then $1.6900 to $1.7800 per pound in 2015.
Cheese prices had averaged $1.7683 per pound in 2013 after averaging $1.7076 per pound in 2012.
USDA now expects nonfat dry milk prices to average $1.7700 to $1.7900 per pound in 2014 and then decline to $1.4100 to $1.4800 per pound next year. NDM prices had averaged $1.7066 per pound in 2013 after averaging $1.3279 per pound in 2012.
Butter price forecasts are reduced for both 2014 and 2015 based on prices to date and weaker expected exports. Butter prices are now expected to average $2.1200 to $2.1500 per pound this year and $1.6600 to $1.7800 per pound in 2015. Butter prices had averaged $1.5450 per pound in 2013 after averaging $1.5943 per pound in 2012.
USDA’s dry whey price forecasts are unchanged from last month. The agency still expects dry whey prices to average 65.0 to 66.0 cents per pound this year and 56.0 to 59.0 cents per pound in 2015. Dry whey prices averaged 59.02 cents per pound in 2013 after averaging 59.35 cents per pound in 2012.
The Class III price for 2014 is raised on stronger cheese prices, but weaker cheese prices in 2015 result in a lower expected Class III price. The Class III price is now forecast to average $22.50 to $22.60 per hundredweight this year and $17.15 to $18.05 per hundred next year. The Class III price had averaged $17.99 per hundred in 2013, $17.44 per hundred in 2012 and a record $18.37 per hundred in 2011.
USDA’s Class IV price forecast is lowered for 2014 as lower butter prices more than offset a higher NDM price. For 2015, both butter and NDM prices will be weaker, resulting in a lower Class IV price forecast.
Specifically, USDA is forecasting that the Class IV price will average $22.05 to $22.25 per hundred in 2014 and $17.05 to $18.05...more