September 12, 2013 — USDA’s monthly World Agricultural Supply and Demand Estimates report issued this morning shows a reduced 2013 milk production forecast from last month, reflecting recent slower growth in milk production. The production forecast for 2014 was unchanged. 2013 output is now pegged at 201.8 billion pounds, down 300 million pounds from last month’s estimate and compares to 200.3 billion in 2012. Look for 2014 production to hit 204.5 billion, unchanged from last month’s projection.
For 2013 fat basis and skim solids imports were lowered slightly from last month. Exports are raised for 2013 and carried into 2014 on strong international demand for dairy products. With forecast export demand, fat and skim-basis ending stocks were reduced in 2013 and 2014. Product price forecasts were mostly higher, with strong export demand and tightening supplies supporting increases for nonfat dry milk (NDM), butter and cheese prices in 2013 and 2014. The whey price forecast was unchanged for 2013 but raised for 2014.
With increased product prices, Class III and Class IV price forecasts for 2013 and 2014 were higher. The 2013 Class III average was put at $17.90-$18.10 per cwt., up a dime from last month’s expectation and compares to $17.44 in 2012. The 2014 average was put at $17.05-$18.05, up 50 cents from a month ago.
The 2013 Class IV average was projected at $18.60-$18.90, up 35 cents from a month ago, and compares to $16.01 in 2012. Look for it to average $18.45-$19.55 in 2014, up 80 cents from last month’s prediction.