U.S. Milk Production Projections Flat for 2014, Slightly Reduced…
According to the December USDA World Agricultural Supply and Demand Estimate (WASDE) report, 2014 U.S. milk production projections were unchanged at 206.2 billion lbs. 2014 projected production of 206.2 billion lbs equates to a 2.5% YOY increase from 2013 production of 201.2 billion lbs and would be a record high production level on an absolute basis. The projected 2.5% YOY increase in milk production is over triple the 2013 YOY milk production increase. 2013 milk production of 201.2 billion lbs resulted in a 0.4% YOY increase and a 0.7% YOY increase when adjusting for leap year. 2014 YTD (Jan-Oct) milk production is up 2.2% YOY; implying YOY milk production growth is expected to increase by 4.0% throughout Nov-Dec ’14. Oct ’14 milk production increased 3.8% YOY.
2015 U.S. milk production projections were reduced from 212.3 billion pounds to 212.2 billion pounds as growth in milk per cow is expected to be more moderate. 2015 projected production equates to a 2.9% YOY increase over 2014 projected production of 206.2 billion lbs. The projected 2.9% YOY increase in production would be the largest in ten years.
Export forecasts on a skim-solids basis were raised for 2014 on stronger whey product sales to date. Fat and skim-solids basis trade forecasts for 2015 were unchanged. Butter prices for 2014 were raised slightly, reflecting current price movements, but the price forecast for 2015 was unchanged at the midpoint of the range. Cheese and NFDM prices were reduced for both 2014 and 2015 as supplies are expected to remain large. Whey prices were unchanged from last month.
Class III price forecasts for 2014 and 2015 were lowered on weaker cheese prices. The Class IV price was unchanged for 2014 as a higher butter price was offset by a lower NFDM price. The 2015 Class IV forecast price was lowered on weaker NFDM prices. As shown in the chart below, the forecasted 2014 all-milk price range of $24.05-$24.15 per cwt was slightly below record high levels reached last month. The 2015 all-milk price is expected to be well below the 2014 price, and was lowered $0.40-$0.50 to $18.45-$19.25 per cwt. 2015 all-milk price forecasts have been reduced in each of the last four WASDE reports.
Export forecasts on a skim-solids basis were raised for 2014 on stronger whey product sales to date. Fat and skim-solids basis trade forecasts for 2015 were unchanged. Butter prices for 2014 were raised slightly, reflecting current price movements, but the price forecast for 2015 was unchanged at the midpoint of the range. Cheese and NFDM prices were reduced for both 2014 and 2015 as supplies are expected to remain large. Whey prices were unchanged from last month.
Class III price forecasts for 2014 and 2015 were lowered on weaker cheese prices. The Class IV price was unchanged for 2014 as a higher butter price was offset by a lower NFDM price. The 2015 Class IV forecast price was lowered on weaker NFDM prices. As shown in the chart below, the forecasted 2014 all-milk price range of $24.05-$24.15 per cwt was slightly below record high levels reached last month. The 2015 all-milk price is expected to be well below the 2014 price, and was lowered $0.40-$0.50 to $18.45-$19.25 per cwt. 2015 all-milk price forecasts have been reduced in each of the last four WASDE reports.