The changes in the milk production forecasts now means milk production is expected to expand by 1.1% in the 2015 calendar year and a further 1.9% in the 2016 calendar year.
The USDA has raised butter prices for the remainder of 2015 and early 2016, as US butter prices have remained stronger than expected. The forecast is now at US$2.065 – 2.095/lb (+6c from the November forecast). Cheese prices have been lowered by 5c from the November forecast, to sit at US$1.640 – 1.650/lb. Cheese prices in the US have been easing recently. Excess global supply is expected to put pressure on non-fat dry milk prices, so the USDA has reduced this forecast to US$0.890 – 0.910/lb (-0.10c from November forecast).
Fat basis imports are expected to be reduced for 2015, by 0.1b pounds, on slower butter imports. On a skim-solids basis there is no change to the USDA’s forecast for imports. Similarly, the USDA has not made any change to its forecast for 2016 imports, on either a fat basis or skim solids basis.
Fat basis exports are unchanged for 2015 but are lowered for 2016 by 0.4b pounds as global supplies of dairy products are expected to remain large and sales of cheese are expected to be under pressure. On a skim-solids basis, exports are lowered for 2015 as lactose and whey protein concentrate sales to date are limiting exports. The USDA expects weaker sales of cheese and lactose in 2016 will dampen skim solids export growth in 2016.
See the full WASDE report here.
