USDA’s 2014 milk production estimate is unchanged from last month, but 2015 milk production is forecast higher, as lower feed costs and strong milk prices are expected to support both herd expansion and gains in milk per cow. According to USDA’s May 9 World Ag Supply & Demand Estimates report:
- 2014 milk production and marketings were projected at 206.1 billion lbs. and 205.2 billion lbs., respectively, unchanged from a month ago. If realized, 2014 production and marketings would be up about 2.4% from 2013.
- 2015 production and marketings were projected at 212.1 billion lbs. and 211.1 billion lbs., respectively. If realized, 2015 production and marketings would be up about 2.9% from 2014.
2014 fat-basis imports are forecast lower, while skim-solids imports are higher. Exports are raised on stronger sales of NDM, butterfat and cheese.
2015 fat-basis exports are forecast lower on increased competition from traditional exporters, primarily in butterfat markets. Continued strength in nonfat dry milk (NDM) will help limit declines in skim-solids exports. Fat-basis import forecasts are expected to be about the same as 2014, but skim-solids imports will be lower.
Projected 2014 butter and whey prices (see table) were raised from last month, while NDM is lower. Cheese is unchanged, but the range is narrowed. The projected Class III price was raised on higher whey prices, and Class IV is up as higher prices for butter more than offset reduced prices for NDM.
The 2014 all milk price is forecast to average $22.70-$23.00/cwt., falling to $19.70-$20.70/cwt. for 2015.
Affecting cull cow prices, May beef steer price projections for 2014 were lowered slightly from April’s estimate, to a range of $143-$149/cwt. Second-quarter 2014 prices are anticipated to be the highest of the year. The lower price forecast comes despite expectations of less beef production, as a declining beef cattle inventory and potential heifer retention during late 2014 and into 2015 is expected to limit cattle placements in late 2014 and into 2015. Thus, despite expectations of heavier slaughter weights, tight supplies of fed cattle for slaughter and reduced cow slaughter will result in lower beef production.
USDA’s initial projections for 2015 steer prices indicate an average in a range of $145-$157/cwt. Lower U.S. beef production is expected to push beef exports lower and imports higher in 2015. Total U.S. red meat and poultry production in 2015 is projected to be above 2014, as higher pork and poultry production more than offsets continued declines in beef production.