USDA Issues WASDE Report for September – All Milk Price Estimate for 2023 Raised to $20.40

In the USDA’s World Agricultural Supply and Demand Estimates (WASDE) issued September 12, the milk production forecasts for 2023 and 2024 are lowered from last month. The cow inventory is reduced, reflecting the average July 2023 cow number reported in the recent Milk Production report. The reduction in cow numbers is expected to continue through 2023 and into the first half of 2024 as returns remain under pressure. For 2023, output-per-cow is forecast to increase at a lower rate than previously expected on recent data and the expected impact of high temperatures during the summer. However, the forecast of milk per cow for 2024 is unchanged.

Fat basis import forecasts for 2023 and 2024 are lowered, largely driven by recent trade data and lower expected imports of cheese and butter throughout the forecast period. Skim-solids basis imports are unchanged for 2023 and 2024. Fat basis export forecasts are unchanged for 2023, while skim-solids basis export forecasts are lowered on weaker whey exports. For 2024, exports on a fat basis are lowered on expectations of fewer shipments of butter and fat containing products and cheese, while exports on a skim-solids basis are reduced, reflecting lower cheese, and whey and whey products shipments. For 2023, forecasts for cheese, butter, and whey prices are raised on current price strength, but nonfat dried milk (NDM) is lowered.

Both Class III and Class IV prices are raised, reflecting changes in their component values. For 2024, price forecasts for cheese, butter and whey are raised on lowered milk production and continued firm demand. NDM price forecasts are lowered. The Class III price forecast is raised on higher cheese and whey prices while the Class IV price forecast is raised as the higher butter price more than offsets the lower NDM price. The 2023 all milk price forecast is raised to $20.40 per cwt and the 2024 all milk price is raised to $20.30 per cwt. The full report may be found at https://www.usda.gov/oce/commodity/wasde/wasde0923.pdf