The economy is expected to continue strengthening as more people receive COVID-19 vaccinations and pandemic-related restrictions are reduced. Government stimulus measures should increase purchasing power of American consumers. Foodservice purchases are expected to continue increasing. These factors are expected to contribute to year-over-year growth in
domestic use of dairy products. However, higher dairy product prices, brought about by greater U.S. and foreign demand, are expected to limit growth in domestic use, especially on a skim solids basis. On a milk-fat basis, the forecast for 2021 domestic use is 222.5 billion pounds, unchanged from last month’s forecast. On a skim-solids basis, the domestic use forecast is 182.5 billion pounds, 1.0 billion pounds lower than last month’s forecast. The forecast for 2021 ending stocks on a milk-fat basis has been lowered to 15.1 billion pounds, 0.4 billion pounds lower than last month’s estimate, as higher net exports more than offset higher expected milk production. On a skim-solids basis, the forecast for 2021 ending stocks is 10.6 billion pounds, 0.1 billion higher than last month’s forecast.
Due to recent upward trends in dairy prices and expectations for greater domestic and foreign demand for dairy products, dairy price forecasts for 2021 have been raised. The price forecasts for Cheddar cheese, dry whey, butter, and NDM are $1.710 (+1.5 cents), $0.525 (+2.5 cents), $1.730 (+11.5 cents), and $1.160 (+2.0 cents) per pound, respectively.
With higher dairy product price forecasts for 2021, Class III and IV milk price forecasts have been raised to $17.10 and $15.15 per cwt, respectively. The all-milk price forecast for 2021 is $18.40 per cwt, $0.65 higher than last month’s forecast
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