Dairy WASDE Update – Aug ’20
According to the August USDA World Agricultural Supply and Demand Estimate (WASDE) report, the 2020 U.S. milk production projection was raised three million pounds from the previous month as higher expected growth in milk per cow yields more than offset slightly lower dairy cow numbers. 2020 projected milk production equates to a 1.3% YOY increase from 2019 production levels.
The 2021 milk production projection was reduced 300 million pounds from the previous month, however, on slower growth in cow numbers. 2021 projected milk production equates to a 1.9% YOY increase from 2020 projected levels, on pace to reach a seven year high growth rate despite the projected decline in production from the previous month.
2020 dairy export forecasts were raised from the previous month on both a milk-fat and skim-solids basis on increased shipments of butterfat products, cheese, dry skim milk products. 2020 dairy import forecasts were raised on a milk-fat basis on continued strong demand for imported butter but reduced from the previous month on a skim-solids basis on lower expected imports of cheese and a number of other dairy products. 2021 dairy export forecasts were also raised from the previous month on both a milk-fat and skim-solids basis on expectations of more competitive butter and cheese prices and strong international demand for skim milk powder, while 2021 import forecasts were unchanged from the previous month on both a milk-fat and skim-solids basis.
2020 projected dairy export volumes translated to 16.3% of total U.S. milk solids production while import volumes were equivalent to 3.7% of total U.S. milk solids production. 2021 projected dairy export volumes also translated to 16.4% of total U.S. milk solids production, up slightly from the previous year projection, while import volumes were equivalent to 3.7% of total U.S. milk solids production, down slightly from the 2020 projection. 2021 net dairy trade is projected to reach a record high level, slightly exceeding the previous 2018 highs.
2020 butter, cheese and nonfat dry milk price forecasts were reduced from the previous month while the 2020 dry whey price forecast was unchanged. The 2020 Class III milk price forecast of $17.40/cwt was reduced $0.60/cwt from the previous forecast while the 2020 Class IV milk price forecast of $13.55/cwt was reduced $0.40/cwt. The 2020 All-Milk price forecast of $17.95/cwt was reduced $0.30/cwt from the previous forecast, finishing 3.7% below 2019 price levels.
2021 butter and cheese price forecasts were reduced from the previous month while the 2021 dry whey price forecast was raised from the previous month and the 2021 nonfat dry milk price forecast was unchanged. The 2021 Class III milk price forecast of $16.10/cwt was reduced $0.10/cwt from the previous forecast, finishing 7.5% below the 2020 projected level, while the 2021 Class IV milk price forecast of $13.65/cwt was reduced $0.15/cwt from the previous forecast but remained 0.7% above the 2020 projected level. The 2021 All-Milk price forecast of $17.05/cwt was unchanged from the previous forecast, finishing 5.0% below 2020 projected levels, reaching a three year low level.
2020 dairy export forecasts were raised from the previous month on both a milk-fat and skim-solids basis on increased shipments of butterfat products, cheese, dry skim milk products. 2020 dairy import forecasts were raised on a milk-fat basis on continued strong demand for imported butter but reduced from the previous month on a skim-solids basis on lower expected imports of cheese and a number of other dairy products. 2021 dairy export forecasts were also raised from the previous month on both a milk-fat and skim-solids basis on expectations of more competitive butter and cheese prices and strong international demand for skim milk powder, while 2021 import forecasts were unchanged from the previous month on both a milk-fat and skim-solids basis.
2020 projected dairy export volumes translated to 16.3% of total U.S. milk solids production while import volumes were equivalent to 3.7% of total U.S. milk solids production. 2021 projected dairy export volumes also translated to 16.4% of total U.S. milk solids production, up slightly from the previous year projection, while import volumes were equivalent to 3.7% of total U.S. milk solids production, down slightly from the 2020 projection. 2021 net dairy trade is projected to reach a record high level, slightly exceeding the previous 2018 highs.
2020 butter, cheese and nonfat dry milk price forecasts were reduced from the previous month while the 2020 dry whey price forecast was unchanged. The 2020 Class III milk price forecast of $17.40/cwt was reduced $0.60/cwt from the previous forecast while the 2020 Class IV milk price forecast of $13.55/cwt was reduced $0.40/cwt. The 2020 All-Milk price forecast of $17.95/cwt was reduced $0.30/cwt from the previous forecast, finishing 3.7% below 2019 price levels.
2021 butter and cheese price forecasts were reduced from the previous month while the 2021 dry whey price forecast was raised from the previous month and the 2021 nonfat dry milk price forecast was unchanged. The 2021 Class III milk price forecast of $16.10/cwt was reduced $0.10/cwt from the previous forecast, finishing 7.5% below the 2020 projected level, while the 2021 Class IV milk price forecast of $13.65/cwt was reduced $0.15/cwt from the previous forecast but remained 0.7% above the 2020 projected level. The 2021 All-Milk price forecast of $17.05/cwt was unchanged from the previous forecast, finishing 5.0% below 2020 projected levels, reaching a three year low level.