2015 U.S. Milk Production Projected Slightly Higher – Sep…
According to the September USDA World Agricultural Supply and Demand Estimate (WASDE) report, 2015 projected U.S. milk production was raised to 208.9 billion lbs, up 0.1 billion lbs from the previous report on a larger expected cow herd and slightly more rapid growth in milk per cow. 2015 projected production equates to a 1.4% YOY increase from 2014 production of 206.0 billion lbs. The projected YOY increase in milk production would remain less than the three year average growth rate of 1.6%. 2016 projected U.S. milk production remained unchanged at 213.0 billion lbs. 2016 projected milk production translates to a 2.0% increase from the 2015 projected production of 208.9 billion lbs.
Fat-basis imports were increased for both 2015 and 2016 while exports continued to be reduced. Domestic butter demand, and to a lesser extent cheese demand, is expected to encourage imports and limit export potential. Skim-solids imports were unchanged for 2015 and 2016 however skim-solids exports were reduced on lower expected sales of nonfat dry milk (NFDM) and whey. Overall dairy product stocks were forecasted higher for both 2015 and 2016 as a result of the increased imports and reduced exports.
Butter price forecasts were revised higher for both 2015 and 2016 on strong domestic demand while cheese prices were raised for 2015 but lowed for 2016 as increased production is expected to outweigh domestic demand growth. NFDM prices were forecasted higher in 2015 reflecting the recent rebound in prices, but the forecast was unchanged for 2016, while whey prices were lowered for both 2015 and 2016.
The 2015 Class III price estimate was lowered $0.05/cwt to $15.80-$16.00/cwt, largely reflecting the lower anticipated whey prices. The 2015 Class IV price estimate was raised $0.55/cwt to $13.55-$13.85/cwt, primarily due to the higher anticipated butter prices. The 2016 Class III price forecast was reduced by $0.45/cwt to $15.00-$16.00/cwt, 2.5% below the 2015 forecasted price at the midpoint. The 2016 Class IV price forecast was raised by $0.10/cwt to $13.60-$14.70/cwt, which remains 3.3% above the 2015 forecasted level.
As shown in the chart below, the 2015 All-Milk price is expected to be well below previous year price levels, at a range of $16.80-$17.00/cwt, up $0.05/cwt from the previous month but 29.5% below the 2014 average All-Milk price of $23.98/cwt. The 2016 All-Milk price forecast of $16.10-$17.10/cwt was reduced by $0.30/cwt, remaining below 2015 forecasted prices on the low end of the forecast for the third consecutive month.
Fat-basis imports were increased for both 2015 and 2016 while exports continued to be reduced. Domestic butter demand, and to a lesser extent cheese demand, is expected to encourage imports and limit export potential. Skim-solids imports were unchanged for 2015 and 2016 however skim-solids exports were reduced on lower expected sales of nonfat dry milk (NFDM) and whey. Overall dairy product stocks were forecasted higher for both 2015 and 2016 as a result of the increased imports and reduced exports.
Butter price forecasts were revised higher for both 2015 and 2016 on strong domestic demand while cheese prices were raised for 2015 but lowed for 2016 as increased production is expected to outweigh domestic demand growth. NFDM prices were forecasted higher in 2015 reflecting the recent rebound in prices, but the forecast was unchanged for 2016, while whey prices were lowered for both 2015 and 2016.
The 2015 Class III price estimate was lowered $0.05/cwt to $15.80-$16.00/cwt, largely reflecting the lower anticipated whey prices. The 2015 Class IV price estimate was raised $0.55/cwt to $13.55-$13.85/cwt, primarily due to the higher anticipated butter prices. The 2016 Class III price forecast was reduced by $0.45/cwt to $15.00-$16.00/cwt, 2.5% below the 2015 forecasted price at the midpoint. The 2016 Class IV price forecast was raised by $0.10/cwt to $13.60-$14.70/cwt, which remains 3.3% above the 2015 forecasted level.
As shown in the chart below, the 2015 All-Milk price is expected to be well below previous year price levels, at a range of $16.80-$17.00/cwt, up $0.05/cwt from the previous month but 29.5% below the 2014 average All-Milk price of $23.98/cwt. The 2016 All-Milk price forecast of $16.10-$17.10/cwt was reduced by $0.30/cwt, remaining below 2015 forecasted prices on the low end of the forecast for the third consecutive month.