2011 dairy outlook a mixed bag

By Dave Natzke

USDA’s World Ag Supply & Demand Estimates report, released Jan. 12, left estimated 2010 U.S. milk marketings (fat basis) unchanged, at 191.8 billion lbs. In addition, imports were reduced another 200 million lbs., to 4.1 billion lbs.

The report reduced expected 2011 milk marketings by about 100 million lbs., to 194.5 billion lbs., and reduced imports by 200 million lbs., to 3.9 billion lbs.

Export projections for 2010 (fat basis) were reduced by 100 million lbs., to 8.1 billion lbs., but increased from previous projections by 100 million lbs. for 2011, to 6.4 billion lbs.

With the WASDE report, USDA calculated final average milk and dairy product prices for 2010. In addition, USDA provided forecasts for 2011, lowering expected prices for cheese and Class III milk, but raising expected prices for butter, dry whey, Class IV and all milk.

The 2010 (actual) and 2011 (forecast) prices averages (respectively) include:

• cheese – $1.5226/lb.; $1.510-$1.590/lb.

• butter – $1.7020/lb.; $1.545-$1.655/lb.

• NDM – $1.1687/lb.; $1.22-$1.28/lb.

• dry whey – 37.16¢/lb.; 37.5¢-40.5¢/lb.

• Class III – $14.41/cwt.; $14.35-$15.15/cwt.

• Class IV – $15.09/cwt.; $14.90-$15.80/cwt.

• all milk – $16.30/cwt.; $16.10-$16.90/cwt.

Impacting cull cow prices, the WASDE report raised estimated placements of cattle in feedlots during the fourth quarter of 2010, which will be ready for slaughter during mid-2011. However, the cattle price forecast for 2011 was raised to reflect continued strong demand for cattle and tightening supplies of fed cattle. USDA will release its Cattle report on Jan. 28, providing an indication of producer intentions for heifer retention in 2011 and feeder cattle availability.

For an outlook of 2010-2011 dairy feedstuff supplies and prices, visit http://dairywebmall.com/dbcpress/?p=9627