USDA whacks milk-price forecast ― again

Tom Quaife, Editor, Dairy Herd Network  |  Updated: 04/10/2012

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The USDA has once again lowered its forecast for 2012 milk prices.

This morning, the USDA’s “World Agricultural Supply and Demand Estimates” report projects that the all-milk price in the U.S. will average between $17.25 and $17.75 per hundredweight this year. That is a downward revision from last month’s forecast of $17.60 to $18.20.

As recently as the January report, USDA was predicting an all-milk price of between $18.30 and $19.10.

“With higher forecast 2012 milk production and weaker than expected product demand, price forecasts for cheese, butter, (nonfat dry milk), and whey are lowered,.” the USDA said in today’s report. “As a result, both Class III and Class IV price forecasts are reduced from last month,” which, in turn, will lower the all-milk price estimate.

The Class III price is expected to average between $16.10 and $16.60 this year, compared to last month’s estimate of $16.35 to $16.95.

High milk production is largely to blame for the bearish price forecasts.

In February, for instance, milk production across the entire U.S. was up 4.3 percent compared to the same month a year earlier. (The calculation was adjusted for Leap Year). That was a hefty increase and marked the 25th month in a row that production was up on a year-over-year basis.

 


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Tom Williams    
Pennsylvania  |  April, 10, 2012 at 09:19 AM

How simple can it be that supply and demand determine the price ALWAYS. Demand is always just about flat, people can only consume so much the rest stays in the cooler or bag for powered milk which increases the supply side in the future.
High milk production is largely to blame for the bearish price forecasts. Yes this article admitted this , how can we get a handle on supply which will also be a handle on price.

bruce scholz    
wisconsin  |  April, 10, 2012 at 09:58 AM

Start shipping cows,heifers out to beef.Export cattle to other countries,STOP using sex semen,
And pray to the good lord.

Barb Troester    
Pennsylvania  |  April, 10, 2012 at 10:31 AM

I am not convinced that the oversupply of milk is the total reason for the price decline. There is a lot of
manipulation and corruption in the market place. The other day I got an e-mail about milk production has
increased too much for the demand. The next e-mail I received stated that some country which I do not
remember the name, was exporting so much more milk products to our country. What sense is this. United
States has too much milk, and yet other countries are exporting milk products to us. This helps drive our price
in the gutter. Just like exporting our grain to China, drives the price of grain up in our country which is good
for the grain farmer, but what about the livestock farmer who is raising the meat and milk products for our
consumers. Again, wake up United States government, take care of our food supply, cause a nation that
cannot feed itself will collapse. Do not forget, farmers are the minority, but we do produce the food.
We all need to pray and ask God to keep this nation safe and secure from injustice.

rod    
ithaca  |  April, 10, 2012 at 12:18 PM

doesnt matter if corn is 10.dollars milk can be 10 too they are not interlocked at least short term

    
April, 10, 2012 at 01:39 PM

What does Rod from Ithaca mean by saying corn can be 10.00 and milk too. They do not interlock. I do not understand exactly what he is saying.

M H    
iowa  |  April, 10, 2012 at 01:36 PM

Winter was to way to good to us. Hard winters and the more stress on the livestock means less milk. So they'll lower milk prices.

M H    
iowa  |  April, 10, 2012 at 01:36 PM

Winter was to way to good to us. Hard winters and the more stress on the livestock means less milk. So they'll lower milk prices.


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