USDA’s Feb. 10 World Ag Supply & Demand Estimates report reduced 2015 milk production projections slightly from last month, as slower growth in output per cow more than offsets faster herd expansion.

2015 production and marketings were projected about 200 million lbs. lower than the previous month’s forecast, at 211.5 billion lbs. and 210.5 million lbs., respectively. If realized, 2015 production and marketings would be up about 2.7% from 2014.

2014 milk production and marketings were estimated at 206.0 billion lbs. and 205.0 billion lbs., respectively, both up about 2.4% from 2013.

USDA’s Cattle report estimated dairy replacement heifers expected to calve during 2015 were up about 1% from a year ago, while the number of milk cows on Jan. 1, 2015, was 1% above 2014 and the highest since 2009.

Projected fat-basis exports for 2015 are unchanged from last month. Skim-solids exports are expected higher, mostly on greater shipments of whey. Fat-basis imports are higher on expectations of greater cheese imports during 2015.

Product price forecasts for butter and whey are projected higher (see table), supported by strong demand and price strength to date. The nonfat dry milk (NFDM) price is lower, as strong competition in export markets is expected to persist during the first half of 2015. The cheese price is unchanged, but the range is narrowed.

The projected 2015 Class III price is raised (see table), based on higher whey prices. The Class IV price is down, as a lower NFDM price more than offsets a higher butter price.

The 2015 all milk price is projected lower, to $17.40-$18.10/cwt. That compares to a 2014 all milk price of $23.97/cwet.

 

Beef prices down slightly

The 2015 forecast of total red meat and poultry production is higher than last month. USDA’s Cattle report, released Jan. 30, revised the 2014 calf crop higher and pointed to a higher level of cattle outside feedlots on Jan. 1, 2015. Given greater supplies of cattle outside feedlots, placements are expected to decline less rapidly during 2015, with fed cattle slaughter higher than forecast last month.

Total beef cow slaughter is raised slightly from last month with larger cow numbers, but is still expected to be below 2014. The increase in slaughter is partly offset by slower growth in carcass weights.

The 2015 beef import forecast is raised from last month as demand for processing grade beef remains strong and strength of the dollar makes the U.S. an attractive market. Beef exports for 2015 are reduced due to relatively high U.S. prices.

Projected beef steer prices for 2015 are lowered $2-$3/cwt. from last month, to $157-$167/cwt., reflecting recent price weakness for fed cattle and greater supplies of competing meats. Prices are slightly weaker in the second half of the year.

 

Feed situation

The WASDE report projected range for the season-average corn farm price was narrowed 5¢ on both ends of the range, to $3.40 to $3.90/bushel (see table). The U.S. season-average soybean price range for 2014/15 is unchanged at $9.45-$10.95/bushel. The soybean meal price was projected at $350-$390/ton, up $10 on both ends of the range.

 

USDA dairy price forecasts 

 

 

 

Estimated

Estimated

Forecast

Product   

2013

2014

2015

Class III ($/cwt)

17.99

22.34

16.30-17.00

Class IV ($/cwt)

19.05

22.09

15.10-15.90

All milk ($/cwt)

20.05

23.97

17.40-18.10

Cheese ($/lb.)

1.7683

2.155

1.595-1.665

Butter ($/lb.)

1.5451

2.136

1.655-1.755

NFDM ($/lb.)

1.7066

1.768

1.185-1.245

Dry whey (¢/lb.)

59.02

65.38

56.0-59.0

Source: USDA World Ag Supply & Demand

 

Estimates report, Feb. 10, 2015

 

 

 

 

 

 

USDA feed price* outlook

 

 

 

Estimated

Estimated

Forecast

Product

2012/13

2013/14    

2014/15

Corn ($/bu.)

6.89

4.46

3.40-3.90

Soybeans ($/bu.)

14.40

13.00

9.45-10.95

Soy meal ($/ton)

468

490

350-390

*U.S. average price paid at the farm level

 

Source: USDA World Ag Supply & Demand

 

Estimates report, Feb. 10, 2015