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2013-2014 milk production, price projections released

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USDA’s World Ag Supply & Demand Estimates (WASDE) report, released May 10, kept projected 2013 milk production estimates steady from a month earlier, and provided first estimates of 2014 production.

• 2013 production and marketings were projected at 201.8 billion lbs. and 200.8 billion lbs., respectively. If realized, 2013 production and marketings would be up about 0.7% from 2012. 

• 2014 production and marketings were projected at 204.6 billion lbs. and 203.7 billion lbs., respectively. If realized, 2014 production and marketings would be up about 1.4% from 2013. Lower feed costs and relatively strong milk prices are expected to support production into 2014. 

Looking at the remainder of 2013, estimated imports are raised, but exports are also higher, as abundant U.S. supplies and competitive prices are expected to spur foreign demand. Cheese, butter and nonfat dry milk (NDM) prices are raised from last month’s forecast, while whey is lower. The Class III price is lowered, with lower whey prices more than offsetting higher cheese prices. The Class IV is forecast higher, reflecting higher prices for butter and NDM. The 2013 all-milk price is forecast at $19.50-$20.00/cwt.

Looking ahead to 2014, commercial exports are forecast higher on robust international demand. Imports will be lower due to greater domestic supplies. With higher domestic production, cheese, butter and whey prices are forecast lower than 2013, while NDM is higher, largely on continued strength in international demand. Both Class III and Class IV prices are forecast lower in 2014. In the case of Class IV, lower forecast butter prices more than offset higher NDM prices. The all-milk price is forecast at $18.85-$19.85/cwt. for 2014.

 

Dairy price forecasts

  Estimated Forecast Forecast
  2012 2013 2014
Class III ($/cwt.) 17.44 17.80-18.30 17.00-18.00
Class IV ($/cwt.) 16.01 18.20-18.80 17.80-18.90
All milk ($/cwt.) 18.51 19.50-20.00 18.85-19.85
Cheese ($/lb.) 1.7076 1.745-1.795 1.675-1.775
Butter ($/lb.) 1.5943 1.570-1.650 1.485-1.615
NFDM ($/lb.) 1.3279 1.590-1.630 1.585-1.655
Dry whey (¢/lb.) 59.35 58.0-61.0 56.5-59.5

Source: USDA WASDE report, May 10, 2013

Beef prices

Tighter cattle supplies and potential beef heifer retention during late 2013 and into 2014 are expected to limit cattle available for placement, thereby reducing fed cattle slaughter in 2014.  Lower cow numbers and beef herd rebuilding will also limit non-fed beef production. 

The 2013 steer price was estimated in a range of $126-$131/cwt., with a range of $127-$137/cwt. in the fourth quarter. That should maintain strong cull cow prices. The first forecast for 2014 finds steer prices expected to average $128-$138/cwt., as supplies continue to tighten. 

 

Feed prices

On the cost side of the dairy equation, the 2013/14 season-average farm price for corn is projected at $4.30-$5.10/bushel, down sharply from the record $6.70-$7.10/bushel average for 2012/13. The U.S. season-average soybean price for 2013/14 is forecast at $9.50-$11.50/bushel, compared with $14.30/bushel in 2012/13.  Soybean meal is forecast at $280-$320/ton in 2013/14, compared to $425/ton in 2012/13.

 

Feed price* outlook, season-average farm price

 

  Estimated Estimated Forecast
  2011/12 2012/13 2013/14
Corn ($/bushel) 6.22 6.70-7.10 4.30-5.10
Soybeans ($/bushel) 12.50 14.30 9.50-11.50
Soy meal ($/ton) 394 425 280-320

Source: USDA WASDE report, May 10, 2013

*Price paid to grower

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