Cow numbers, milk per cow and milk production forecasts are unchanged in USDA’s March Livestock, Dairy & Poultry Outlook report, issued March 14. The milk-feed price ratio supports expansion; however, adverse weather and poor forage quality will limit output per cow in the near term. Herd expansion is likely later this year. Milk and dairy product price forecasts are raised this month on strong demand, both foreign and domestic.
Milk per cow is also unchanged from the February forecast of 22,230 lbs. per cow. Growth in output per cow was below the 5-year average in January. It is likely that the colder-than-normal winter in the Upper Midwest, combined with the apparent variable forage quality of last year’s hay crop, contributed to lower than expected output per cow. In contrast and despite drought conditions, milk per cow increased in California and underpinned January’s nearly 5% year-over-year rise in milk output in that state. A return to more normal forage quality this spring in most of the United States will likely boost milk per cow in the second quarter. The milk production forecast is unchanged from February at 205.7 billion lbs. for the year.
Dairy cow culling remains strong, but prices for replacement heifers and dairy calves are higher than last year, suggesting that herd expansion could be in the offing.
Corn prices are unchanged from February, but the price range was narrowed in this month’s World Agricultural Supply and Demand Estimates report to $4.25-$4.75/bushel despite slightly higher projected corn exports. Soybean meal prices are increased to $450-$490/ton this month as a reduced soybean meal crush lowered projected meal production. The preliminary February alfalfa price is reported in the February Agricultural Prices at $188 per ton, up from January but well below a year ago. These projected feed prices will likely have little impact on the strongly expansionary milk-feed price ratio, reported at 2.55 in the Agricultural Prices report. Much of the strong milk-feed price ratio can be attributed to record high milk prices.
Commercial milk equivalent exports are raised this month to 12.4 billion lbs. on a fats basis based on strong year-to-date movement of cheese to Mexico and South Korea. In addition, butter exports to North Africa and Middle East countries are stronger than earlier forecast, helping lift export forecasts. Exports on a skims solids basis are unchanged from last month’s forecast at 38.2 billion pounds as increased lactose and cheese sales are offset by slightly lowered forecasts of skim milk powder and whey exports. Imports on both a fats and skims-solids basis are unchanged from February to 3.7 billion and 5.3 billion lbs., respectively. Ending stocks on a fats basis are lowered on stronger foreign and domestic demand for cheese and butter. Ending stocks on a skims-solids basis are reduced slightly this month from February.