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USDA Cuts 2015 Milk Production Forecast By 1.1 Billion Pounds, Hikes Price Forecasts
The US Department of Agriculture (USDA), in its monthly supply-demand estimates released Thursday, reduced its 2015 milk production forecast from last month and increased its product price forecasts for cheese and butter.
Milk production this year is now projected to total a record 210.0 billion pounds, down 1.1 billion pounds from last month’s forecast but still 4.0 billion pounds higher than 2014’s milk output. USDA said it is lowering its milk production forecast as growth in output per cow is constrained by dry conditions in the West.
Fat basis dairy imports are raised on demand for butterfat, but skim-solids imports are unchanged. Exports are hampered by relatively weak international prices and the strong United States dollar; thus, forecasts for both fat and skim-solids are reduced from last month.
Product price forecasts for cheese and butter are raised due to domestic demand strength.
USDA now projects that cheese prices will average $1.6250 to $1.6750 per pound this year, up from last month’s forecast of $1.6000 to $1.6600 per pound but still well below last year’s record-high average of $2.1551 per pound.
The butter price this year is now projected to average $1.7050 to $1.7850 per pound, up from last month’s forecast of $1.6700 to $1.7600 per pound but still well below 2014’s record-high average of $2.1361 per pound.
However, relatively weak exports of nonfat dry milk are expected to pressure prices lower, USDA said.
The agency now projects that nonfat dry milk prices will average $1.0900 to $1.1300 per pound this year, down from last month’s forecast of $1.2050 to $1.2550 per pound and also down from 2014’s average price of $1.7682 per pound.
USDA’s dry whey price forecast is unchanged from last month, at 49.0 to 52.0 cents per pound.
Last year, the dry whey price averaged 65.38 cents per pound, after averaging around 59 cents per pound in both 2012 and 2013.
The Class III price forecast is raised on the strength of cheese prices. USDA now projects that the Class III price will average $16.20 to $16.70 per hundredweight this year, up from last month’s forecast of $15.95 to $16.55 per hundred but well below 2014’s record-high average of $22.34 per hundred.
USDA’s Class IV price forecast is reduced as a lower nonfat dry milk (NDM) price more than offsets a
higher butter price.
The agency is now forecasting a Class IV price average for this year of $14.45 to $15.05 per hundred, down from last month’s forecast of $15.30 to $16.00 per hundred and well below Send me more information.