According to the November USDA World Agricultural Supply and Demand Estimate (WASDE) report, the 2021 milk production projection was reduced six million pounds from the previous month on smaller dairy cow numbers and lower milk per cow yields, reaching an 11 month low projected level. 2021 projected milk production equates to a 1.7% YOY increase from 2020 levels, which would finish slightly below the 2020 growth rate.

U.S. milk production volumes are expected to increase by an additional 0.8% throughout 2022, although the 2022 milk production projection was reduced 1.6 billion pounds from the previous month as lower forecasted cow numbers and milk per cow yields were carried forward.

2021 dairy export forecasts were raised from the previous month on a milk-fat basis on stronger expected sales of cheese and butterfat products while remaining unchanged on a skim-solids basis. 2021 dairy import forecasts were reduced on a milk-fat basis on lower expected imports of butterfat products but raised on a skim-solids basis.

2022 dairy export forecasts were also raised from the previous month on a milk-fat basis on higher expected sales of cheese and butterfat products while remaining unchanged on a skim-solids basis. 2022 dairy import forecasts were reduced on a milk-fat basis on lower expected imports of butterfat products while remaining unchanged on a skim-solids basis.

2022 projected dairy export volumes equated to 18.2% of total U.S. milk solids production, down slightly from the record high level projected throughout the previous year, 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 reach a record high annual level for the third consecutive year.

2021 butter, dry whey and nonfat dry milk price forecasts were raised from the previous month on strong demand and lower expected production, while the cheese price was lowered on current prices and continued large supplies. The 2021 Class III milk price forecast of $16.95/cwt was reduced $0.10/cwt from the previous forecast, finishing 6.7% below the previous year price level. The 2021 Class IV milk price forecast of $16.00/cwt was raised $0.30/cwt from the previous forecast, finishing 18.6% above the previous year price level. The 2021 All-Milk price forecast of $18.50/cwt was raised $0.05/cwt from the previous forecast, finishing 1.0% above the 2020 price level.

2022 butter, cheese, dry whey and nonfat dry milk price forecasts were all raised from the previous month on strong demand and lower expected milk supplies. The 2022 Class III milk price forecast of $17.75/cwt was raised $0.65/cwt from the previous forecast, finishing 4.7% above the previous year’s projected price level. The 2022 Class IV milk price forecast of $18.70/cwt was raised $1.55/cwt from the previous forecast, finishing 16.9% above the previous year’s projected price level. The 2022 All-Milk price forecast of $20.25/cwt was raised $1.05/cwt from the previous month, finishing 9.5% above the previous year’s projected price level and reaching an eight year high level, overall.