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WASDE: 2013 milk output lowered; price outlook improves a little

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USDA’s World Ag Supply & Demand Estimates (WASDE) report, released Sept.12, reduced projected 2013 milk production estimates from a month earlier, but 2014 production estimates were unchanged.

   • 2013 production and marketings were projected at 201.8 billion lbs. and 200.8 billion lbs., respectively. Each are down about 300 million lbs. from last  month’s projections. If realized, 2013 production and marketings would be up less than 1% from 2012. 

• 2014 production and marketings were projected at 204.5 billion lbs. and 203.6 billion lbs., respectively. If realized, 2014 production and marketings would be up about 1.3% from 2013. 

Fat-basis exports for 2013 were raised and carried into 2014 on strong international demand for dairy products. Skim-solid imports were lowered slightly from last month.

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 all-milk price was forecast at $19.70-$19.90/cwt. for 2013; and $19.35-$20.35/cwt. for 2014.

 

Dairy price forecasts

  Estimated Forecast Forecast
  2012 2013 2014
Class III ($/cwt.) 17.44 17.90-18.10 17.05-18.05
Class IV ($/cwt.) 16.01 18.60-18.90 18.45-19.55
All milk ($/cwt.) 18.53 19.70-19.90 19.35-20.35
Cheese ($/lb.) 1.7076 1.755-1.775 1.670-1.770
Butter ($/lb.) 1.5943 1.500-1.540 1.470-1.600
NFDM ($/lb.) 1.3279 1.675-1.695 1.675-1.745
Dry whey (¢/lb.) 59.35 58.5-60.5 58.5-61.5

Source: USDA WASDE report, Sept. 12, 2013

Beef price outlook steady, strong

USDA’s World Ag Supply & Demand Estimates report left the 2013-2014 beef price projections unchanged. Steer prices are projected in a range of $122-$128/cwt. for the final quarter of 2013, and in a range of $126-$136/cwt. for all of 2014.

USDA raised 2013 beef production estimates, citing higher cow and bull slaughter. For 2014, the beef production forecast is raised, as higher second-half production increases more than offset a reduced first-half forecast. Partly offsetting the increase in later-year marketings and relatively high early-year cow slaughter is a small reduction in carcass weights. 

 

Corn, soybean prices diverge

USDA latest Crop Production report, released Sept. 12, forecasts 2013 corn production at 13.8 billion bushels, up less than 1% from the August forecast and up 28% from 2012. If realized, this will be a new U.S. production record. Based on conditions as of Sept. 1, yields are expected to average 155.3 bushels per acre, up 0.9 bushels from the August forecast and 31.9 bushels above the 2012 average. If realized, this will be the highest average yield on record, behind only 2009 and 2004. Eleven states expect a record high corn yield for 2013. The Sept. 1 corn yield data indicate the highest number of ears on record for the combined 10 objective yield states (Illinois, Indiana, Iowa, Kansas, Minnesota, Missouri, Nebraska, Ohio, South Dakota and Wisconsin). 

Area harvested for grain is forecast at 89.1 million acres, unchanged from the August forecast but up 2% from 2012. 

WASDE’s projected season-average farm price for corn was lowered 10¢ at both ends of the range, to $4.40-$5.20/bushel.

 

Soybean production is forecast at 3.15 billion bushels, down 3% from August, but up 4% from last year. If realized, production will be the fourth largest on record. Area for harvest is forecast at 76.4 million acres, unchanged from August, but up slightly from 2012. If realized, this will be the second largest harvested area on record. Based on Sept. 1 conditions, yields are expected to average 41.2 bushels per acre, down 1.4 bushels from last month, but up 1.6 bushels from last year. The September objective yield data for the combined 11 major soybean-producing states (Arkansas, Illinois, Indiana, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Ohio and South Dakota) indicate a higher pod count compared with last year as conditions have generally been more favorable across the Midwest. Compared with final counts for 2012, pod counts are up in seven of the 10 published states. 

The U.S. season-average soybean price for 2013/14 is forecast at $11.50-$13.50/bushel, up $1.15/bushel on both ends of the range. Soybean meal prices are projected at $360-$400/ton, up $55/ton at the midpoint.

 

 Likely to affect the feed price, 2013 cotton production is forecast down 1% from last month and down 26% from last year. As a result, the cottonseed harvest was estimated at 4.291 million tons, down about 2% from August’s estimate and the smallest cottonseed harvest since 2009.

 

Feed price* outlook, season-average farm price

 

  Estimated Estimated Forecast
  2011/12 2012/13 2013/14
Corn ($/bushel) 6.22 6.90-7.00 4.40-5.20
Soybeans ($/bushel) 12.50 14.40 11.50-13.50
Soy meal ($/ton) 394 455 360-400

Source: USDA WASDE report, Sept. 12, 2013             *Price paid to grower

 

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