U.S. Milk Production Projections Increased – Sep ’14
According to the September USDA World Agricultural Supply and Demand Estimate (WASDE) report, 2014 U.S. milk production projections were increased from the second month in a row, from 206.0 billion lbs to 206.3 billion lbs, on additional expected growth in output per cow. 2014 projected production of 206.3 billion lbs equates to a 2.5% YOY increase from 2013 production of 201.2 billion lbs and would be a record high production level on an absolute basis. The projected 2.5% YOY increase in milk production is over triple the 2013 YOY milk production increase. 2013 milk production of 201.2 billion lbs resulted in a 0.4% YOY increase and a 0.7% YOY increase when adjusting for leap year. 2014 YTD (Jan-Jul) milk production is up 1.7% YOY; implying YOY milk production growth is expected to accelerate by 3.7% throughout the remainder of the year. 2015 U.S. milk production projections remained unchanged, at 212.5 billion pounds. 2015 projected production equates to a 3.0% YOY increase over 2014 projected production of 206.3 billion lbs. The projected 3.0% YOY increase in production would be the largest in ten years. Export forecasts for 2014 and 2015 were lowered as higher forecast U.S. butter and cheese are expected to remain uncompetitive in global markets. Butter and cheese price forecasts were raised for 2014 as strength is expected to continue into the first part of 2015. NFDM price forecasts were lowered for both 2014 and 2015, with whey price forecasts remaining unchanged for 2014 and down slightly in 2015. Class III price forecasts were raised for both 2014 and 2015 while Class IV price forecasts while raised for 2014 but reduced in 2015. As shown in the chart below, the forecasted 2014 all-milk price range of $23.80-$24.00 per cwt reached new highs. The 2015 all-milk price is expected to be well below the 2014 price, and was lowered $0.35 to $19.40-$20.40 per cwt.