Commercial export forecasts for 2016 have been lowered by 0.3 billion pounds on a milk-fat milk-equivalent basis and by 0.7b pounds on a skim-solids milk-equivalent basis.
International supply and demand conditions are continuing to fuel the weakness of dairy prices. Average prices for US cheese, butter and nonfat dry milk declined from December to January with butter making the biggest fall from US$2.571/lb in December to US$2.076/lb in January. Over January prices improved from US$2.041/lb at the beginning and ending with US$2.150/lb. US butter prices are still well ahead of Oceania and Europe prices with their export butter prices at uS$1.384/lb and US$1.355/lb respectively.
Dry whey made a small monthly increase.
Forecasts for 2016 remain low and unchanged from last months forecasts for feed prices.
The USDA forecast for milk production in Q1 2016 has been raised by 0.1 billion pounds. The production forecast for 2016 has been increased by 0.1 billion pounds from last month to a total of 211.9 billion pounds.
Exports of dairy products has been reduced due to weak demand and high international supplies on the global market. Forecasts for 2016 exports have been lowered by 0.3 billion pounds on a milk-fat milk-equivalent basis and by 0.7 billion pounds on a skim-solids milk-equivalent basis.
Domestic commercial use of butter in 2016 is expected to be 0.6b pounds ahead of last month’s forecast on a milk-fat basis.
The strength of the domestic market has led to an increase in the price forecast for butter to US$1.99-US$2.09/lb. Prices are expected to have a lid on them due to weak exports and high supplies.
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