Continued improvements in the relationship between milk prices and feed costs are expected to support expansion of the U.S. dairy herd in 2015, according to USDA’s Livestock, Dairy & Poultry Outlook report, released June 18.
June projected corn prices were lowered slightly from May to $4.45-$4.65/bushel for 2013/14, based on reported prices to date. The 2014/15 corn price is forecast below current year prices, but is unchanged from the May projection of $3.85-$4.55/bushel.
The soybean meal price for 2013/14 is estimated at $485/ton. The 2014/15 soybean meal price forecast is unchanged from May, but is expected to be sharply lower than this year at $355-$395/ton. The preliminary alfalfa price was reported in the May Agricultural Prices report at $224/ton, higher than April’s reported price and about the same as May a year ago.
The likely stronger milk-feed price ratios for both this year and next should presage expanded year-over-year production.
Last month’s forecast of herd expansion in the second half of the year was based on strong milk prices and moderating feed costs. The June forecast is unchanged from May, and cow numbers are placed at 9.255 million head for the current year. Cow numbers for 2015 are forecast up slightly from 2014 to 9.340 million head, also unchanged from the May forecast.
Current-year output per cow is lowered fractionally from May to 22,270 lbs. per cow, and is based on lower expected output per cow in the second quarter. Next year’s forecast of output per cow is unchanged from May, and is up nearly 2% from the 2014 projection.
The June milk production forecast for 2014 rounds to 206.1 billion lbs., unchanged from May. For 2015, milk production is unchanged from May at 212.1 billion lbs.
Fats basis 2014 milk equivalent imports were raised in June to 3.5 billion lbs., but are expected to slip to 3.4 billion lbs. in 2015. Skims-solids basis milk equivalent imports are raised this month to 5.6 billion lbs. for the current year and to 5.2 billion lbs. for 2015. The forecast increases from May are based on higher imports of food preparation items, whey products, and, to a lesser extent, casein and milk protein concentrates.
June forecast fats-basis exports for 2014 are increased this month from May to 13.4 billion lbs. and to 13 billion lbs. for 2015. Butter exports have retreated as U.S. prices have become less competitive on the global market. The butter decline was more than offset by continued strong cheese exports. The higher June forecasts are expected to carry over into 2015. However on a year-over-year basis, the 2015 forecast export decline is based on expected strong foreign competition.