According to the USDA's latest Livestock, Dairy and Poultry report, Corn price forecasts were unchanged in the January World Agricultural Supply and Demand Estimates after being lowered in December. Corn prices for 2012/13 are forecast at $6.80-$8.00 per bushel. However, soybean meal prices were lowered slightly in the January forecast to $430 - $460 per ton.
According to the December Agricultural Prices report, the December price for alfalfa hay was $217 per ton, changing little from November’s reported price but still above year-earlier prices. Until the end of December, weekly dairy cow slaughter has been above year-earlier levels and the 3-year average since early in 2012, yet dairy cow numbers for much of 2012 remained above 2011.
Along with steady replacement heifer prices, this high slaughter rate suggests some herd freshening among producers. Expectations of moderating feed prices, down from last summer’s drought-induced highs, led to slightly higher 2013 forecast dairy cow numbers in January. The dairy herd is expected to average 9,135 million head for 2013. Yield per cow is forecast at 21,880 pounds per cow, unchanged from December. Production for 2013 is projected at 199.9 billion pounds, up slightly from last month based on the higher expected cow numbers.
Imports for 2013, on a fats basis, were raised to 4 billion pounds based on higher expected cheese and butterfat imports. Imports on a skims-solids basis were unchanged from December at 5.4 billion pounds. Exports were raised on both a fats and skims-solids basis, to 9.0 billion pounds and 33.6 billion pounds, respectively.
Fats basis exports were raised on stronger expected cheese sales, while the skimssolids export forecast increase is based on expected strong demand for nonfat dry milk (NDM) and whey.
Ending stocks for 2013 were raised to 11.3 billion pounds on a fats basis and to 11.7 billion pounds on a skims-solids basis. The increased stocks forecast is based on the higher forecast 2013 milk production and slightly less robust demand.
Prices for cheese and butter were lowered this month based on current price weakness and apparent slow demand. Meanwhile, prices for NDM and whey were raised based on current price strength and expected strong export demand for dry products. The 2013 cheese price was lowered from December to $1.710-$1.790 per pound, and butter prices were lowered from December to $1.535-$1.645 per pound.
The NDM price is forecast at $1.455-$1.515 per pound, up from last month. The whey price is expected to be 61.0-64.0 cents per pound this year. The Class III milk price was reduced to $17.65-$18.45 per cwt this month as the lower forecast cheese price countered the higher expected whey price.
Similarly, the Class IV price was lowered this month to $16.90-$17.80 per cwt as weaker butter prices more than offset the higher expected NDM price. The all milk price was reduced to $18.85- $19.65 per cwt