USDA lowers milk production forecasts
Source: The DairyNews
It seems like the dairy industry is in for a challenging year in 2023, with the USDA revising its milk production forecast downward once again in its December World Ag Supply and Demand Estimates (WASDE) report.
The predicted production of 226.9 billion lbs. is notably lower, and the reduced growth in milk per cow is a contributing factor. Looking ahead to 2024, production expectations have also been adjusted downward to 229 billion lbs. due to lower milk cow numbers and reduced milk per cow.
The impact on dairy product prices is evident, particularly in the butter market. Lower exports have led to a decrease in butter prices to $2.62 per lb., marking a substantial drop from the previous year. Forecasts for 2024 remain conservative at $2.595 per lb. The import and export dynamics are influencing prices further, with adjustments in fat and skim-solids basis forecasts.
Cheese prices have seen a minor dip for 2023, but the outlook for 2024 suggests a more significant decrease to $1.72 per lb. This, in turn, affects the Class III and Class IV price forecasts, with Class III prices dropping to $17.05 per cwt in 2023 and a substantial hit for 2024, down to $16.85. Similarly, Class IV 2023 price predictions have decreased to $19.10 per cwt, while 2024 forecasts have been raised slightly to $18.90.
The overall all-milk price for 2023 has experienced a decline of 10 cents, now standing at $20.60 per cwt, a significant difference from 2022. Looking ahead to 2024, the all-milk price sits at $20.25 per cwt, reflecting a continued downward trend.
The impact on dairy product prices is evident, particularly in the butter market. Lower exports have led to a decrease in butter prices to $2.62 per lb., marking a substantial drop from the previous year. Forecasts for 2024 remain conservative at $2.595 per lb. The import and export dynamics are influencing prices further, with adjustments in fat and skim-solids basis forecasts.
Cheese prices have seen a minor dip for 2023, but the outlook for 2024 suggests a more significant decrease to $1.72 per lb. This, in turn, affects the Class III and Class IV price forecasts, with Class III prices dropping to $17.05 per cwt in 2023 and a substantial hit for 2024, down to $16.85. Similarly, Class IV 2023 price predictions have decreased to $19.10 per cwt, while 2024 forecasts have been raised slightly to $18.90.
The overall all-milk price for 2023 has experienced a decline of 10 cents, now standing at $20.60 per cwt, a significant difference from 2022. Looking ahead to 2024, the all-milk price sits at $20.25 per cwt, reflecting a continued downward trend.
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