According to the February USDA World Agricultural Supply and Demand Estimate (WASDE) report, the 2021 milk production projection was raised seven million pounds from the previous month, primarily on higher dairy cow numbers. 2021 projected milk production equates to a 2.2% YOY increase from 2020 levels, which would be a seven year high growth rate. The 2021 milk production projection was the largest experienced throughout the ten months of available projections.

2021 dairy export forecasts were raised on both a milk-fat and skim-solids basis on higher expected shipments of butterfat and other dairy products. 2021 dairy import forecasts were raised on a milk-fat basis on higher expected imports of cheese and butterfat products, while remaining unchanged on a skim-solids basis.

2021 projected dairy export volumes translated to 17.1% of total U.S. milk solids production, up 0.6% from the record high levels experienced throughout 20120, while import volumes were equivalent to 3.6% of total U.S. milk solids production, down slightly from the previous year. 2021 net dairy trade is projected to reach a record high level for the second consecutive year.

2021 butter and cheese price forecasts were reduced from the previous month on current prices, increased production and larger stocks. 2021 dry whey and nonfat dry milk price forecasts were raised from the previous month on firm demand.

The 2021 Class III milk price forecast of $16.60/cwt was reduced $0.30/cwt from the previous forecast, finishing 8.6% below previous year price levels. The 2021 Class IV milk price forecast of $13.70/cwt was reduced $0.40/cwt from the previous forecast but remained 1.6% above previous year price levels. The 2021 All-Milk price forecast of $17.15/cwt was reduced $0.50/cwt from the previous forecast, finishing 6.4% below 2020 price levels and reaching a three year low level.