USDA Issues WASDE Report for December – All Milk Price Estimate for 2023 Raised to $22.70

The milk production forecast for 2022 is unchanged from last month. The 2023 production forecast is raised slightly with both higher expected cow numbers and slightly more rapid growth in output per cow. Fat and skim-solids basis imports for 2022 are raised, driven by recent trade data and expectations of continued demand for imported cheese and butterfat products. Forecasts for 2023 fat basis and skim-solids basis imports are raised on imports of butter and milk proteins, respectively.

Exports on a fat basis for 2022 and 2023 are raised on butter and casein. Exports on a skim-solids basis are raised in 2022 as higher nonfat dry milk (NDM) more than offsets lower lactose. The 2023 forecast is reduced on lower lactose shipments. For 2022, forecasts for butter and cheese are raised on recent prices and expectations of continued strength in demand, but whey and NDM prices are unchanged.

The Class III price is raised on the higher cheese price and the Class IV price is raised on the higher butter price. For 2023, the price forecasts for cheese and butter are raised as demand strength carries into 2023, but prices for NDM and whey are lowered on pressure from international markets. The higher cheese price more than offsets the lower whey price and the Class III price is raised while the Class IV price forecast is lowered, reflecting the lower NDM price. The 2022 all milk price forecast is raised to $25.65 per cwt and the 2023 all milk price is raised to $22.70 per cwt.