Dairy outlook: More milk, weaker Class III
USDA’s Livestock, Dairy & Poultry Outlook report, released March 14, raised projected 2013 milk production estimates by about 900 million lbs. from a month earlier. Like the World Ag Supply & Demand Estimates (WASDE) report, released March 8, the outlook was largely due to a slower pace of herd reduction and higher first-quarter milk production per cow.
Compared to last month's outlook, forecast cow numbers were raised for the first half of 2013, but lowered for the second half of the year. The U.S. dairy herd is expected to average 9.195 million cows for 2013, a contraction from 2012, but higher than February’s forecast. Output per cow was raised slightly to 21,960 lbs., based on higher milk per cow in the first quarter.
• 2013 production and marketings were projected at 201.9 billion lbs. and 200.9 billion lbs., respectively. If realized, 2013 production and marketings would be up about 0.8% from 2012.
Projected prices for cheese and whey were lowered, due to expectations of increased production and moderate demand. The forecast butter price was unchanged, although the range tightened. The forecast price of NDM was raised, as stronger export demand is expected.
As the result, the 2013 Class III milk price forecast was reduced from last month, to a range of $17.55-$18.15/cwt. The projected Class IV was increased, in a range of $17.35-$18.05/cwt. The 2013 projected all-milk price was raised to $19.00-$19.60/cwt.
To see the report, click here.