U.S. Milk Production Projected Higher for 2016 – May…
According to the May USDA World Agricultural Supply and Demand Estimate (WASDE) report, the 2016 U.S. milk production projection was raised for the second consecutive month as the cow inventory is expected to expand slightly and growth in milk per cow is expected to remain higher than initially projected during the first half of the year. 2016 projected milk production of 212.4 billion pounds was raised by 0.6 billion pounds, finishing at a six month high. 2016 projected production translates to a 1.8% increase from the 2015 production levels, which would be slightly higher than the ten year average growth rate. Projected milk production is expected to increase an additional 1.3% throughout 2017 according to the initial estimate provided within the May report as improved forage availability and continued favorable feed costs are expected to support gains in milk per cow yields.
2016 export forecasts were raised on a milk-fat basis and unchanged on a skim-solids basis while imports were raised on a both a milk-fat and skim-solids basis. The 2016 projected dairy export volumes translated to 13.9% of total U.S. milk solids production while import volumes were equivalent to 4.1% of total U.S. milk solids production. U.S. net dairy trade projections remained flat for the third consecutive month during the May report.
2017 export forecasts were raised on both a milk-fat and skim-solids basis as expected tighter world supplies and increasing demand are expected to lead to expanded export opportunities. 2017 import forecasts were lowered as increases in domestic production are expected to continue.
Cheese, butter and nonfat dry milk (NFDM) price forecasts were lowered for 2016 on weaker demand and large supplies, but whey prices were raised. The 2016 Class III price estimate was reduced by $0.50/cwt, finishing at $13.15-$13.65/cwt, as declines in projected cheese prices offset projected increases in dry whey prices while the 2016 Class IV price estimate was reduced by $0.25/cwt, to $12.65-$13.25/cwt, on declines in projected butter and NFDM prices. The 2016 All-Milk price forecast of $14.60-$15.10/cwt was reduced by $0.40/cwt, remaining below 2015 forecasted prices on both ends of the forecast for the eighth consecutive month. The 2016 projected All-Milk price translates to a 13.1% reduction from 2015 price levels however the initial 2017 projected All-Milk price of $15.25-$16.25/cwt is expected to rebound by 6.1%.
2016 export forecasts were raised on a milk-fat basis and unchanged on a skim-solids basis while imports were raised on a both a milk-fat and skim-solids basis. The 2016 projected dairy export volumes translated to 13.9% of total U.S. milk solids production while import volumes were equivalent to 4.1% of total U.S. milk solids production. U.S. net dairy trade projections remained flat for the third consecutive month during the May report.
2017 export forecasts were raised on both a milk-fat and skim-solids basis as expected tighter world supplies and increasing demand are expected to lead to expanded export opportunities. 2017 import forecasts were lowered as increases in domestic production are expected to continue.
Cheese, butter and nonfat dry milk (NFDM) price forecasts were lowered for 2016 on weaker demand and large supplies, but whey prices were raised. The 2016 Class III price estimate was reduced by $0.50/cwt, finishing at $13.15-$13.65/cwt, as declines in projected cheese prices offset projected increases in dry whey prices while the 2016 Class IV price estimate was reduced by $0.25/cwt, to $12.65-$13.25/cwt, on declines in projected butter and NFDM prices. The 2016 All-Milk price forecast of $14.60-$15.10/cwt was reduced by $0.40/cwt, remaining below 2015 forecasted prices on both ends of the forecast for the eighth consecutive month. The 2016 projected All-Milk price translates to a 13.1% reduction from 2015 price levels however the initial 2017 projected All-Milk price of $15.25-$16.25/cwt is expected to rebound by 6.1%.