Corn prices for 2012/13 are forecast at $6.70-$7.10 per bushel—the price range was narrowed, but the mid-point is unchanged from April. Initial forecasts for the 2013/14 year call for corn prices to decline to $4.30-$5.10 per bushel. Higher expected yields and higher expected global supplies counter the slow start to this season’s planting and underpin the 2013/14 forecast.

Current-year soybean price estimates are unchanged from April’s forecast; similarly, the soybean meal price forecasts are unchanged from April at $425 a ton. In 2013/14, soybean meal prices are forecast much lower at $280-$320 per ton. Soybean production is forecast up based on higher yields and slightly higher harvested acreage.

Meanwhile, the April Milk Production report shows the January-March 2013 U.S. milk production at 50.5 billion pounds, 1.1 percent lower than the corresponding period last year. Some of the decline is due to the absence of a February 29th this year. However, some of the southern and western States are showing larger declines this year than can be accounted for by 2012’s leap-day. Meanwhile, many other States are posting yearover-year quarterly increases in milk production.

Beginning with the April Milk Production report, the National Agricultural Statistics Service is no longer reporting cow numbers or output per cow, at least through the end of this fiscal year. Consequently, USDA is not forecasting milk cow inventories or milk per cow. For May, the milk production forecast is unchanged from April. This year’s milk production is projected at 201.8 billion pounds. The 2014 milk production forecast is 204.6 billion pounds. Improved producer margins would auger for a sizeable rebound in milk production in 2014.

Current-year fats basis imports are raised to 4 billion pounds this month based on higher than expected imports of butterfat in the first quarter. Imports for the balance of 2013 are lowered slightly. Skims-solids imports were increased for the year to 5.6 billion pounds based on continued demand for casein and milk protein concentrates. For 2014, fats basis imports were lowered to 3.9 billion pounds and skims-solids basis imports were lowered to 5.4 billion pounds, based on higher U.S. milk production in 2014 and lower milk prices.

Exports on both a fats and skims-solids basis were increased in May to 10.0 and 34.7 billion pounds respectively for 2013. Current U.S. and Oceania prices favor U.S. exports. Next year, fats basis exports are forecast to climb to 10.3 billion pounds and skims-solids basis exports are projected at 36.4 billion pounds, an increase from 2013’s projected total.

Continued strength in international demand and favorable U.S. prices relative to Oceania will likely keep exports firm. This year’s fats basis ending stocks were raised to 12 billion pounds for May and are forecast to decline to 11.8 billion pounds by the end of 2014. Skims-solids ending stocks were raised to 12.1 billion pounds in the May forecast for 2013 and are expected to end at 12.1 billion pounds for 2014. Continued robust international and domestic demand is expected to tighten stocks from their first-quarter levels.

For 2013, prices for cheese, butter, and nonfat dry milk (NDM) were raised based on expected second-quarter strength. Cheese prices are forecast at $1.745-$1.795 per pound, butter prices are forecast at $1.570-$1.650 per pound, and NDM prices are projected at $1.590-$1.630 per pound.

In contrast, whey prices are lowered, based on current and expected whey price weakness, to 58.0-61.0 cents per pound. The Class III price is lowered to $17.80-$18.30 per cwt as whey price weakness more than offset the higher cheese price. The Class IV price is raised to $18.20- $18.80 per cwt as a result of higher NDM and butter prices. The all milk price for 2013 is projected at $19.50-$20.00 per cwt.

Next year, increased demand will likely offset greater expected production to some degree, but prices for cheese, butter and whey are forecast lower. Cheese prices are forecast at $1.675-$1.75 per pound, butter is forecast at $1.485-$1.615 per pound and whey prices are forecast lower at 56.5-59.5 cents per pound. NDM prices are forecast slightly higher at $1.585-$1.655 per pound based on continued international demand.

The 2014 Class III milk price is forecast at $17.00-$18.00 per cwt, and the Class IV milk price is forecast at $17.80-$18.90 per cwt. The 2014 all milk price is forecast at $18.85-$19.85 per cwt