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WASDE: Dairy outlook changes small

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USDA’s USDA’s World Ag Supply & Demand Estimates (WASDE) report, released Dec. 11, left 2012 and 2013 milk production estimates unchanged from a month earlier, with only small adjustments to price projections.

• 2012 production and marketings were projected at 199.7 billion lbs. and 198.7 billion lbs., respectively. If realized, 2012 production and marketings would be up about 1.8% and 1.7%, respectively, from 2011. 

• 2013 milk production and marketings were unchanged from both last month’s forecast, as well as 2012, at 199.7 billion lbs. and 198.7 billion lbs., respectively. 

Compared to a month ago, 2012 and 2013 milk and product prices were mixed, with projected 2012 cheese and butter prices reduced, but nonfat dry milk and dry whey prices raised. In 2013, butter price projections were reduced, with cheese, nonfat dry milk and dry whey all forecast higher.

Projected producer Class III and Class IV milk prices were just as mixed, with only minor changes forecast. As a result, the 2012 all-milk price was unchanged at $18.50-$18.60/cwt., while the 2013 all-milk price was narrowed to $19.15-$19.95/cwt.

 

Dairy product, milk price estimates, projections

 

Estimated

Forecast

Forecast

Product

2011

2012

2013

Class III ($/cwt.)

18.37

17.40-17.50

18.00-18.80

Class IV ($/cwt.)

19.04

15.95-16.15

17.00-17.90

All milk ($/cwt.)

20.14

18.50-18.60

19.15-19.95

Cheese ($/lb.)

1.8246

1.700-1.710

1.750-1.830

Butter ($/lb.)

1.9498

1.585-1.615

1.595-1.705

NFDM ($/lb.) 

1.5058

1.320-1.340

1.440-1.500

Dry whey (¢/lb.)

53.25

59.5-60.0

60.0-63.0

Source: World Ag Supply & Demand Estimates report, Dec. 11, 2012

On the cost side of the dairy equation, the 2012/13 estimated season-average corn price range was lowered 15¢-25¢/bushel, in a range of $6.80-$8.00/bushel. The U.S. season-average soybean price was projected 45¢/bushel lower on both ends of the range, at $13.55-$15.55/bushel; and soybean meal prices were projected down $15/ton compared to last month’s forecast, at $440-$470/ton.

 

Feed price estimates, forecasts

 

Estimated

Estimated

Forecast

Item

2010/11

2011/12

2012/13

Corn ($/bu.)

5.18

6.22

6.80-8.00

Soybeans ($/bu.)

11.30

12.50

13.55-15.55

Soybean meal ($/tom)

346

394

440-470

 Source: World Ag Supply & Demand Estimates report, Dec. 11, 2012

 

Even though USDA raised 2013 beef production estimates, it also raised the beef price forecast slightly, which could strengthen cull cow prices. Projected beef production was raised, due to higher fed and non-fed cattle slaughter and heavier carcass weights. Steer prices were raised to nearly $123/cwt. for 2012, and in a range of $124-$134/cwt. in 2013 (up $1 on each end of the range), reflecting strong demand for cattle through the end of this year and into 2013. 

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