World Agricultural Supply and Demand Estimates Lower Milk Production, Prices

The “WASDE” milk production forecasts for 2021 and 2022 are reduced from last month on lower expected dairy cow numbers. For 2021, the fat basis import forecast is raised from last month on firm demand for butterfat and cheese imports, while the fat basis export forecast is reduced. The skim-solids basis import forecast for 2021 is raised primarily on higher imports of milk proteins while the export forecast is raised primarily on stronger expected sales of whey and lactose.

For 2022, the fat basis import forecast is raised on continued strong import demand for butter and butterfat, while the fat basis export forecast is raised as U.S. butter prices are expected to be competitive. The skim-solids basis import and export forecasts are unchanged from last month. For 2021, butter, cheese, nonfat dry milk, and whey price forecasts are lowered on relatively weak demand.

Dairy product prices are also reduced for 2022 reflecting continued relatively soft domestic demand and higher forecast beginning stocks. The 2021 and 2022 Class III and Class IV price forecasts are reduced from the previous month on lower forecast dairy product prices. The 2021 all milk price is forecast lower at $17.95 per cwt. The all milk price forecast for 2022 is $17.85 per cwt.