USDA issued its World Agricultural Supply and Demand Estimates on May 12. Milk production for 2023 is forecast above 2022 driven by gains in milk per cow, with the milk cow herd expected to average close to 2022 levels. Exports on a fat basis are forecast lower, largely on lower expected butter sales. On a skim-solids basis, exports are forecast higher with gains expected in cheese, skim milk powder, and whey sales. Imports are projected to grow on a skim-solids basis with higher imports of a number of dairy products but are unchanged on a fat basis. The Class III price is forecast lower on weaker cheese and whey prices. The Class IV price is forecast lower as well, with projections lower than 2022 for butter and non-fat dry milk. The 2023 all milk price is forecast at $23.55 per cwt.
The 2022 milk production forecast is raised from the previous month, with higher milk cow inventories more than offsetting slower growth in milk per cow. Fat-basis exports are raised from the previous month mainly on stronger butter and cheese shipments. The skim-solids basis export forecast is lowered on weaker skim milk powder and whey exports. Fat basis and skim-solids basis import forecasts are raised from last month on higher expected imports of a number of dairy-containing products. Cheese and butter prices are raised from the previous month on strong demand, but non-fat dry milk and whey prices are lowered. The Class III price is unchanged and Class IV is lowered. The 2022 all milk price is forecast at $25.75.
NOTE: Russia’s recent military invasion of Ukraine significantly increased the uncertainty of agricultural supply and demand conditions in the region and globally. The May WASDE represents an ongoing assessment of the short-term impacts as a result of this action.
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