USDA dairy outlook: Modest expansion ahead

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USDA’s Livestock, Dairy & Poultry Outlook report was released May 15, forecasting a modest expansion in light of the current strong profit signals to producers.

Cow numbers are forecast at 9.255 million head for 2014, unchanged from April and only slightly higher than 2013 levels. Forecast cow numbers for 2015 are for 9.34 million head. Prices for dairy replacements are ahead of year-earlier prices, and first-quarter dairy cow slaughter trails last year.

Current-year output per cow also remains unchanged in May from April at 22,280 lbs. per cow. Output per cow is projected at 22,710 lbs. in 2015. Continued month-over-month declines in Midwestern milk output are moderated by higher milk output in the West. Increased output per cow reflects both improved producer returns and improved forage conditions, especially in the Midwest, after last year’s poor-quality harvest.

U.S. January-March 2014 U.S. milk production was estimated at 51.1 billion lbs., up 1% from the corresponding period last year. Total milk production is forecast at 206.1 billion lbs. this year, climbing to 212.1 billion lbs. in 2015. Milk production expansion to date appears to be coming mostly from increased output per cow rather than from herd expansion.

For 2014, the price range for cheese was narrowed to $1.995-$2.025/lb. Nonfat dry milk (NDM) prices have weakened in the face of foreign competition, and the forecast was lowered slightly to $1.830-$1.860/lb., as the upper end of the price range ws lowered from April. In contrast, butter and whey prices are forecast higher, at $1.800-$1.860/lb. and 63.0¢-65.0 ¢/lb., respectively. The price increases are based on strong year-to-date demand for these products.

Milk price projections were narrowed slightly from the April forecast, and will weaken as 2014 progresses into 2015. The Class III and Class IV quarterly projections are compared with CME closing prices for May 15 (see table).

 

Milk price averages & forecasts, $/cwt., May 15, 2014

 

 

All milk

Class III

Class III

Class IV

Class IV

 

USDA/1

CME/2

USDA/1

CME/2

USDA/1

2009

12.83

 

11.36

 

10.89

2010

16.26

 

14.41

 

15.09

2011

20.14

 

18.37

 

19.04

2012

18.53

 

17.44

 

16.01

2013

20.05

 

17.99

 

19.05

2014

 

 

 

 

 

    Q1

24.53

22.61

22.61

23.14

23.10

    Q2

24.40-24.70

22.48

22.70-23.00

22.63

22.70-23.10

    Q3

21.30-21.90

19.86

18.95-19.55

21.40

20.30-21.00

    Q4

20.20-21.10

19.09

17.65-18.55

20.45

18.60-19.60

Year*

22.70-23.00

21.01

20.55-20.85

21.90

21.25-21.65

2015

 

 

 

 

 

    Q1

20.35-21.35

18.12

16.40-17.40

18.86

17.60-18.70

    Q2

 

17.97

 

16.96

 

    Q3

 

17.83

 

16.62

 

    Q4

 

17.65

 

16.80

 

Year*

19.70-20.70

17.89

16.90-17.90

17.31

18.55-19.65

 

1/ USDA prices and forecasts from Livestock, Dairy & Poultry

Outlook report (www.ers.usda.gov), issued May 15, 2014.

 

2/ Simple average of Chicago Mercantile Exchange

 

 futures prices at close of trading on May 15, 2014.

 

* Average may include actual federal milk marketing

 

order Class III and Class IV prices for affected months.

 

The 2014 Class III price was bumped up slightly to $20.55-$20.85/cwt., as whey price strength more than offsets the cheese price. The Class IV price was raised to $21.25-$21.65/cwt., as butter price strength more than balances lower NDM prices. The all milk price for 2014 is projected at $22.70-$23.00/cwt.

Looking ahead to 2015, the annual Class III milk price is forecast at $16.90-$17.90/cwt., and the Class IV milk price is forecast at $18.55-$19.65/cwt. The 2015 all milk price is forecast at $19.70-$20.70/cwt.

Feed prices are likely to remain moderate compared with recent years for the balance of 2013/14 and into 2014/15. Corn prices for 2013/14 are raised in May from April and forecast at $4.50-$4.80/bushel; the price range was narrowed at the lower end, boosting the mid-point by 5¢. Initial forecasts for the 2014/15 year call for corn prices to decline to $3.85-$4.55/bushel.

Current-year soybean meal price estimates are raised slightly from April to $485/ton. The initial 2014/15 soybean meal price forecast is much lower, at $355-$395/ton.

April’s Agricultural Prices report placed April’s preliminary price for alfalfa hay at $206/ton, above March’s $191/ton price, but below the April 2013 price of $213/ton.



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Sam    
May, 16, 2014 at 09:39 AM

Why did the USDA purchase a lot of automatic weapons with 30 round clips? Same as the IRS.


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