According to the January USDA World Agricultural Supply and Demand Estimate (WASDE) report, the 2021 milk production projection was unchanged from the previous month, remaining 1.6% above previous year levels. The 2021 projected YOY increase in milk production volumes which would finish below the 2020 growth rate of 1.9%.

U.S. milk production volumes are expected to increase by an additional 0.7% throughout 2022. The 2022 projected milk production forecast was also unchanged from the previous month. The 2022 YOY increase in U.S. milk production volumes would be the smallest experienced throughout the past three years and the second smallest experienced throughout the last nine years.

2021 dairy export forecasts were reduced from the previous month on a milk-fat basis but raised from the previous month on a skim-solids basis on recent trade data. 2021 dairy import forecasts were raised from the previous month on both a milk-fat and skim-solids basis on higher imports of cheese, milk proteins and butterfat products.

2022 dairy export forecasts were reduced from the previous month on both a milk-fat and skim-solids basis on lower expected global demand. 2022 dairy import forecasts were raised from the previous month on both a milk-fat and skim-solids basis on higher imports of cheese, milk proteins and butterfat products.

2022 projected dairy export volumes equated to 18.2% of total U.S. milk solids production, down slightly from the record high level experienced throughout 2021, while import volumes were equivalent to 3.6% of total U.S. milk solids production, on pace to reach a four year low level. 2022 net dairy trade is projected to remain unchanged from the record high level experienced throughout 2021.

2022 butter, cheese, dry whey and nonfat dry milk price forecasts were all raised from the previous month on firm domestic demand and tight supplies. The 2022 Class III milk price forecast of $19.65/cwt was raised $1.50/cwt from the previous forecast, finishing 15.0% above previous year price levels. The 2022 Class IV milk price forecast of $20.90/cwt was raised $1.90/cwt from the previous forecast, finishing 29.9% above previous year price levels. The 2022 All-Milk price forecast of $22.60/cwt was raised $1.85/cwt from the previous month, finishing 21.2% above the previous year price levels and reaching an eight year high level, overall.