This comes after second quarter production was higher than had been expected and production is now expected to remain slightly higher for the rest of the year. The milk production forecast for 2013 has been raised to 202 billion lbs, and the forecast for 2014 was unchanged at 204.5 billion lbs. In 2014 there will likely be cheaper corn prices, though a lower milk price will keep increases production down to a modest lift.
The forecast for both fat basis dairy product exports and in skim solids exports has also been raised. The increase in export forecasts comes through a combination of growth in global demand for dairy products and less foreign competition. Cheese exports were above 2012 levels in April, though were behind in May, but butterfat exports have been increasing. Skim solids export forecasts for 2013 have been lifted 0.2 billion lbs to 36.6 billion lbs. This was lead higher by nonfat dry milk (NDM) exports shooting upwards in April and May, as well as whey products bolstering the forecast with higher May exports. Ending stocks for fat basis and skim solid products were both raised in April, with higher than expected stocks of NDM recorded in May.
Cheese and butter forecast prices have both been lowered this month, and forecasts are for further sliding prices. Cheese prices were only fractionally down to $1.735-$1.765/lb and are expected to decline further to $1.630-$1.730/lb in 2014. Butter forecasts are now down at $1.515-$1.575 for 2013 and $1.450-$1.580/lb in 2014. Higher stocks of these products have been pressuring these prices downwards. Despite higher stock of NDM forecast prices moved upwards in July due to strong export demand and are now forecast at $1.615-$1.645/lb for 2013.
Corn prices for 2013 still remain high at $6.15-$7.15/bushel. After the new harvest in the 2013/2014 season prices are expected to drop to $4.40-$5.20/bushel. The lower planting acreage has been offset by higher imports and lower feed and residual use to keep projections the same.
