U.S. Milk Production Projected Slightly Higher for 2016 –…
According to the February USDA World Agricultural Supply and Demand Estimate (WASDE) report, the 2016 U.S. milk production projection was raised slightly to reflect the higher than anticipated January 1st dairy cow inventory figures. 2016 projected milk production of 211.9 billion pounds was raised by 0.1 billion pounds from the lowest projection on record experienced in the previous month. 2016 projected production translates to a 1.6% increase from the 2015 production levels, consistent with the ten year average growth rate.
Export forecasts were reduced for 2016 on both a milk-fat and a skim-solids basis as global supplies of dairy products remain large and the U.S. dollar remains relatively strong. Butter prices were raised for 2016 on strong domestic demand while cheese prices were unchanged, however whey and NFDM prices were reduced as U.S. prices continue to reflect weakness in international markets. The 2016 Class III price estimate was reduced by $0.05/cwt at the midpoint to $14.05-$14.75/cwt on lower whey prices while the 2016 Class IV price estimate was reduced by $0.40/cwt at the midpoint to $13.00-$13.80/cwt as lower projected NFDM prices more than offset higher projected butter prices.
As shown in the chart below, the 2015 All-Milk price of $17.08/cwt finished significantly below the 2014 average All-Milk price of $23.98/cwt, down 28.8%. The 2016 All-Milk price forecast of $15.30-$16.00/cwt was reduced by $0.10/cwt at the midpoint, remaining below 2015 forecasted prices on both ends of the forecast for the fifth consecutive month. The 2016 projected All-Milk price translates to an 8.4% reduction from 2015 price levels.
Export forecasts were reduced for 2016 on both a milk-fat and a skim-solids basis as global supplies of dairy products remain large and the U.S. dollar remains relatively strong. Butter prices were raised for 2016 on strong domestic demand while cheese prices were unchanged, however whey and NFDM prices were reduced as U.S. prices continue to reflect weakness in international markets. The 2016 Class III price estimate was reduced by $0.05/cwt at the midpoint to $14.05-$14.75/cwt on lower whey prices while the 2016 Class IV price estimate was reduced by $0.40/cwt at the midpoint to $13.00-$13.80/cwt as lower projected NFDM prices more than offset higher projected butter prices.
As shown in the chart below, the 2015 All-Milk price of $17.08/cwt finished significantly below the 2014 average All-Milk price of $23.98/cwt, down 28.8%. The 2016 All-Milk price forecast of $15.30-$16.00/cwt was reduced by $0.10/cwt at the midpoint, remaining below 2015 forecasted prices on both ends of the forecast for the fifth consecutive month. The 2016 projected All-Milk price translates to an 8.4% reduction from 2015 price levels.