Dairy WASDE Update – Apr ’18
According to the April USDA World Agricultural Supply and Demand Estimate (WASDE) report, the 2018 U.S. milk production projection was unchanged from the previous month, remaining at a three month high level. 2018 projected milk production equates to a 1.6% YOY increase from 2017 production levels, slightly above ten year average figures.
2018 export forecasts were unchanged from the previous month on a milk-fat basis but raised on a skim-solids basis on stronger expected sales of nonfat dry milk, skim milk powder and lactose. The 2018 import forecast was reduced slightly on a milk-fat basis and unchanged on a skim-solids basis. 2018 projected dairy export volumes translated to 15.8% of total U.S. milk solids production while import volumes were equivalent to 3.6% of total U.S. milk solids production. 2018 projected net dairy trade of 12.2% is on pace to reach a five year high.
The 2018 butter price forecast was reduced from the previous month as prices are expected to increase more slowly than previously anticipated in the second half of the year. 2018 dry whey and nonfat dry milk price forecasts were also reduced from the previous month while the 2018 cheese price forecast was unchanged from the previous month with a narrowed range. The 2018 Class III price forecast of $14.20-$14.70/cwt was reduced by $0.15/cwt at the midpoint on lower dry whey prices, finishing 10.6% below 2017 price levels. The 2018 Class IV price forecast of $13.25-$13.85/cwt was reduced by $0.05/cwt at the midpoint on lower nonfat dry milk and butter prices, finishing 10.6% below the 2017 Class IV price. The 2018 projected All-Milk price of $15.60-$16.10/cwt was reduced by $0.20/cwt at the midpoint, finishing 10.2% lower YOY.
2018 export forecasts were unchanged from the previous month on a milk-fat basis but raised on a skim-solids basis on stronger expected sales of nonfat dry milk, skim milk powder and lactose. The 2018 import forecast was reduced slightly on a milk-fat basis and unchanged on a skim-solids basis. 2018 projected dairy export volumes translated to 15.8% of total U.S. milk solids production while import volumes were equivalent to 3.6% of total U.S. milk solids production. 2018 projected net dairy trade of 12.2% is on pace to reach a five year high.
The 2018 butter price forecast was reduced from the previous month as prices are expected to increase more slowly than previously anticipated in the second half of the year. 2018 dry whey and nonfat dry milk price forecasts were also reduced from the previous month while the 2018 cheese price forecast was unchanged from the previous month with a narrowed range. The 2018 Class III price forecast of $14.20-$14.70/cwt was reduced by $0.15/cwt at the midpoint on lower dry whey prices, finishing 10.6% below 2017 price levels. The 2018 Class IV price forecast of $13.25-$13.85/cwt was reduced by $0.05/cwt at the midpoint on lower nonfat dry milk and butter prices, finishing 10.6% below the 2017 Class IV price. The 2018 projected All-Milk price of $15.60-$16.10/cwt was reduced by $0.20/cwt at the midpoint, finishing 10.2% lower YOY.