Livestock producers are breathing a momentary sigh of relief as the U.S. Department of Agriculture reports a slight decrease in its expected corn prices.

In a report issued Friday morning, the USDA projects corn prices to average $6.95 to $8.25 per bushel, down from last month’s estimates of $7.10 to $8.50 per bushel. The USDA also raised its corn production forecast for 2012-2013 by 0.3 bushel to 19 million bushels in its "World Agricultural Supply and Demand Estimates" report, increasing corn yield to 122.3 bushels per acre.

However, while corn may have dipped in price, it still remains high by historical standards.

Meanwhile, the USDA said Class III milk prices will average $17.55-$17.60 per hundredweight this year -- unchanged from October’s report. The USDA also made no change to its estimate for the all-milk price, which it still projects to average $18.50 to $18.60 per hundredweight. Though most of the average prices were unchanged, the USDA did raise the all-milk price forecast for 2013, expecting it to average $19.10 to $20.per hundredweight.

Here’s what USDA economists had to say about the overall dairy situation:

“The 2012 milk production forecast is raised on higher estimated milk per cow in the third quarter, but production forecasts for the remainder of 2012 and 2013 are unchanged from last month…

“Cheese prices are forecast lower in 2012, but the forecast is unchanged for 2013. Butter prices for both 2012 and 2013 are lowered as butter stocks are forecast higher than last month. Nonfat dry milk is forecast higher for both years. The whey price forecast is unchanged for 2012 but is raised for 2013. The Class III price for 2012 is unchanged, but the Class IV price forecast is lower on weaker butter prices. For 2013, higher whey and nonfat dry milk prices push the Class III and Class IV price forecasts higher. The all milk price is forecast at $18.50 to $18.60 per cwt for 2012, unchanged from last month, but the forecast for 2013 is raised to $19.10 to $20.00 per cwt.”

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