U.S. Milk Production Projections Increased Slightly for 2014, Reduced…
According to the November USDA World Agricultural Supply and Demand Estimate (WASDE) report, 2014 U.S. milk production projections were increased from 206.1 billion lbs to 206.2 billion lbs, on higher growth in milk per cow. 2014 projected production of 206.2 billion lbs equates to a 2.5% YOY increase from 2013 production of 201.2 billion lbs and would be a record high production level on an absolute basis. The projected 2.5% YOY increase in milk production is over triple the 2013 YOY milk production increase. 2013 milk production of 201.2 billion lbs resulted in a 0.4% YOY increase and a 0.7% YOY increase when adjusting for leap year. 2014 YTD (Jan-Sep) milk production is up 2.0% YOY; implying YOY milk production growth is expected to increase by 3.9% throughout the final quarter of the year. Sep ’14 milk production increased 4.0% YOY.
2015 U.S. milk production projections were reduced from 212.8 billion pounds to 212.3 billion pounds as the expansion in cow numbers and growth in milk per cow are expected to be more moderate than previously projected. 2015 projected production equates to a 3.0% YOY increase over 2014 projected production of 206.2 billion lbs. The projected 3.0% YOY increase in production would be the largest in ten years.
Export forecasts for 2014 and 2015 were lowered as U.S. dairy products, especially on a skim solids basis, remain less competitive in global markets. Cheese and NFDM prices were raised for 2014, reflecting current price movements, but the price forecasts for 2015 were lowered as domestic supplies are expected to be relatively large. Butter prices were reduced for both 2014 and 2015 based on prices to date and weaker expected exports. Whey prices remained unchanged from last month.
The Class III price forecast was raised for 2014 on stronger cheese prices, but weaker projected cheese prices in 2015 resulted in a lower expected Class III price. The Class IV price was lowered for 2014 as lower butter prices more than offset higher NFDM prices. For 2015, both butter and NFDM prices are expected to be weaker, resulting in a lower Class IV price forecast. As shown in the chart below, the forecasted 2014 all-milk price range of $24.15-$24.25 per cwt reached new highs. The 2015 all-milk price is expected to be well below the 2014 price, and was lowered $0.10 to $18.85-$19.75 per cwt. 2015 all-milk price forecasts have been reduced in each of the past three WASDE reports.
Export forecasts for 2014 and 2015 were lowered as U.S. dairy products, especially on a skim solids basis, remain less competitive in global markets. Cheese and NFDM prices were raised for 2014, reflecting current price movements, but the price forecasts for 2015 were lowered as domestic supplies are expected to be relatively large. Butter prices were reduced for both 2014 and 2015 based on prices to date and weaker expected exports. Whey prices remained unchanged from last month.
The Class III price forecast was raised for 2014 on stronger cheese prices, but weaker projected cheese prices in 2015 resulted in a lower expected Class III price. The Class IV price was lowered for 2014 as lower butter prices more than offset higher NFDM prices. For 2015, both butter and NFDM prices are expected to be weaker, resulting in a lower Class IV price forecast. As shown in the chart below, the forecasted 2014 all-milk price range of $24.15-$24.25 per cwt reached new highs. The 2015 all-milk price is expected to be well below the 2014 price, and was lowered $0.10 to $18.85-$19.75 per cwt. 2015 all-milk price forecasts have been reduced in each of the past three WASDE reports.