The latest World Agricultural Supply and Demand Estimates (WASDE) released by the USDA forecast milk production to increase to 206.3 billion pounds in 2014. This is a 2.5% increase from 2013. An increased in per cow productivity is the factor that is driving the higher forecast. USDA's previous forecast in August was for 206 billion pounds in 2014.
The 2015 milk production forecast is unchanged from the previous forecast at 212.5 billion pounds. This assumes a further 3% growth in the milk supply will occur next year.
Export forecasts for 2014 and 2015 have been lowered as the high prices are forecast in the U.S. domestic market, therefore U.S. butter and cheese are less competitive in world markets. Export sales of some other dairy products are also expected to be limited. Meanwhile imports on both a Skim-solids and fat-basis have been raised for both 2014 and 2015
as supplies in competing exporters are expected to be large while U.S. prices remain relatively high.
Butter and cheese price forecasts are raised for 2014 with strength in both expected to continue into the first part of 2015. Nonfat dry milk prices are forecast lower in 2014 and 2015. The forecast whey price is unchanged for 2014 but is lowered fractionally for 2015.
Class III prices for 2014 and 2015 are raised. The Class IV price is higher in 2014 but reduced in 2015. The all milk price is raised to US$23.80 – $24.00 per cwt for 2014, and is lowered for 2015 to US$19.40 – $20.40 per cwt.
