2016 U.S. Milk Production Projected Lower– Jul ’16
According to the July USDA World Agricultural Supply and Demand Estimate (WASDE) report, the 2016 U.S. milk production projection was lowered for the first time in four months as the pace of the cow herd expansion has slowed. 2016 projected milk production of 212.4 billion pounds was lowered by 0.2 billion pounds but remained at the second highest projected level over the past eight months. 2016 projected production translates to a 1.8% increase from the 2015 production levels, which would be slightly higher than the ten year average growth rate. Projected milk production is expected to increase an additional 1.5% throughout 2017, finishing at an estimated level of 215.6 billion pounds, up 0.3 billion pounds from the previous month’s projection.
2016 export forecasts on a milk-fat basis were lowered as slowing sales of butterfat products more than offset higher whole milk powder (WMP) exports, while the 2017 forecast was unchanged. On a skim-solids basis, export forecasts for 2016 and 2017 were raised on higher WMP sales. Skim-solids basis stocks were subsequently reduced, however fat basis stocks were forecast higher as stocks of butter remain high. The 2016 projected dairy export volumes translated to 13.9% of total U.S. milk solids production while import volumes were equivalent to 4.0% of total U.S. milk solids production. U.S. net dairy trade projections remained below 10.0% of production for the fifth consecutive month during the July report.
Cheese, butter, dry whey and nonfat dry milk (NFDM) price forecasts were raised for both 2016 and 2017 as demand remains robust. The 2016 Class III price estimate was raised by $0.45/cwt at the midpoint, finishing at $13.90-$14.20/cwt, while the 2016 Class IV price estimate was raised by $0.60/cwt at the midpoint, finishing at $13.80-$14.20/cwt. The 2016 All-Milk price forecast of $15.55-$15.85/cwt was raised by $0.55/cwt at the midpoint but remained 8.1% below 2015 price levels. The 2017 projected All-Milk price of $15.70-$16.70/cwt is expected to rebound by 3.2%, up $0.45/cwt from the previous month.
2016 export forecasts on a milk-fat basis were lowered as slowing sales of butterfat products more than offset higher whole milk powder (WMP) exports, while the 2017 forecast was unchanged. On a skim-solids basis, export forecasts for 2016 and 2017 were raised on higher WMP sales. Skim-solids basis stocks were subsequently reduced, however fat basis stocks were forecast higher as stocks of butter remain high. The 2016 projected dairy export volumes translated to 13.9% of total U.S. milk solids production while import volumes were equivalent to 4.0% of total U.S. milk solids production. U.S. net dairy trade projections remained below 10.0% of production for the fifth consecutive month during the July report.
Cheese, butter, dry whey and nonfat dry milk (NFDM) price forecasts were raised for both 2016 and 2017 as demand remains robust. The 2016 Class III price estimate was raised by $0.45/cwt at the midpoint, finishing at $13.90-$14.20/cwt, while the 2016 Class IV price estimate was raised by $0.60/cwt at the midpoint, finishing at $13.80-$14.20/cwt. The 2016 All-Milk price forecast of $15.55-$15.85/cwt was raised by $0.55/cwt at the midpoint but remained 8.1% below 2015 price levels. The 2017 projected All-Milk price of $15.70-$16.70/cwt is expected to rebound by 3.2%, up $0.45/cwt from the previous month.