Fat-basis imports are increased as domestic demand continues to support higher imports of cheese and butter. For the 2015 year these have been increased to 6 billion pounds in the October report compared to 5.9b pounds projected last month. Projections for domestic demand has been slightly lifted for 2015 to 204b pounds from 203.8b pounds a month earlier.
For the 2016 year fat-basis import projections have been increased to 5.9 billion pounds in the October report compared to 5.7b pounds last month. Projections for domestic demand has been slightly lifted for 2016 as well to 208b pounds from 207.8b pounds a month earlier.
Exports are reduced for 2015 on weaker cheese sales, but are unchanged for 2016. Skim-solids imports are reduced for 2015 and 2016, while exports are reduced for 2015 and unchanged for 2016.
The WASDE report says pressure will remain on exports during 2015 and 2016 due to large world supplies of dairy products, a strong dollar, and generally weak global demand.
Although butter prices have declined sharply from recent high levels, domestic demand for butter is expected to support relatively high butter prices during 2016. The butter price for 2015 is unchanged at the midpoint, and is raised for 2016. Cheese prices are raised for 2015 and 2016 on support from domestic demand. Nonfat dry milk prices are forecast higher in 2015 and 2016 reflecting a rebound in both domestic and international prices.
Whey prices are lowered for both 2015 and 2016 as supplies are large. Class III prices are raised for 2015, but lowered for 2016 as the decline in whey prices more than offsets higher cheese prices. Class IV prices are raised for both 2015 and 2016 due to higher butter and NDM prices. The all milk price is raised to $16.90-$17.00/cwt for 2015, but lowered to $16.05-$16.95/cwt for 2016.
