For 2023, milk production is forecast lower as weaker milk prices are expected to result in lower cow inventories. The Cattle report estimated that the January 1, 2023 dairy cow inventory was only fractionally above 2022 and that producers were retaining about two percent fewer heifers for addition to the dairy herd. Output per cow is also reduced slightly.
On both fat- and skim-solids bases, imports for 2023 are raised on higher cheese and milk protein containing products, while exports are reduced on lower sales of skim milk powder, cheese, and several other products. Prices are lowered for cheese as stocks remain relatively large and domestic demand is expected to remain generally soft. Butter prices are unchanged as higher early-year prices are offset by weaker prices later in the year. Nonfat dry milk powder and whey prices are lowered on expectations of increased export competition and somewhat softer international demand.
Both Class III and Class IV prices are lowered from last month, reflecting lower product price forecasts, and the all milk price is reduced to 20.70 per cwt, down from $21.60 last month.
The full report is available here https://www.usda.gov/oce/commodity/wasde/wasde0123.pdf
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