WASDE: 2014 dairy, beef price projections raised

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By Dave Natzke

USDA’s World Ag Supply & Demand Estimates (WASDE) report, released March 10, left the 2014 milk production forecast unchanged, but raised projected dairy product and milk prices.

• 2014 production and marketings were projected at 205.7 billion lbs. and 204.7 billion lbs., unchanged from the previous month. If realized, 2014 production and marketings would be up about 2.2% from 2013. 

• 2013 marketings were estimated at 200.3 billion lbs., up 100 million lbs. from last month, and up about 0.5% from 2012. 

Projected fat-basis 2014 exports were raised on higher sales of cheese and butter, but skim-solid exports were unchanged, as lower lactose and weaker-than-expected early year sales of nonfat dry milk (NFDM) offset gains in cheese. Fat-basis imports were unchanged, but projected skim-solid imports were raised on strong demand for milk protein concentrates.

Cheese, butter, NDM and whey were projected higher, supported by strong demand and price strength to date. As a result, 2014 Class III ($18.95-$19.55/cwt.) and Class IV ($20.35-$21.05/cwt.) price forecasts were raised, with the 2014 all-milk price now projected at $21.40-$22.00/cwt., up 45¢-55¢ from last month's forecast.

 

Dairy price forecasts 

 

 

 

Estimated

Estimated

Forecast

Product   

2012

2013

2014

Class III ($/cwt)

17.44

17.99

18.95-19.55

Class IV ($/cwt)

16.01

19.05

20.35-21.05

All milk ($/cwt)

18.53

20.01

21.40-22.00

Cheese ($/lb.)

1.7076

1.7683

1.860-1.920

Butter ($/lb.)

1.5943

1.5451

1.605-1.695

NFDM ($/lb.)

1.3279

1.7066

1.825-1.875

Dry whey (¢/lb.)

59.35

59.02

0.580-0.610

Source: USDA World Ag Supply & Demand

Estimates report, March 10, 2014

 

 

Beef prices

Affecting cull cow prices, March cattle price projections for 2014 were raised from February’s estimate – reflecting tight supplies and continued price strength for fed cattle – even though 2014 beef production is expected to increase.

Continued relatively large cattle placements in the first quarter of 2014 are expected to result in higher slaughter in 2014. Coupled with heavier carcass weights and higher expected first-quarter cow slaughter, the beef production forecast was raised.

However, affecting total meat supply, the beef production increase will be offset by declines in pork, broiler and turkey production. The beef import forecast for 2014 is unchanged from last month, but the export forecast is raised on strong sales to Asian markets.

The 2014 forecast steer price is in a range of $138-$146/cwt., up $6 on each end of the range from last month’s forecast. Prices are expected to be the strongest in the first half of the year. The 2013 steer price was estimated in at $125.89/cwt.

 

Feed prices

On the feed side of the dairy equation, USDA’s World Ag Supply & Demand Estimates report reduced  U.S. feed grain ending stocks for 2013/14, with corn stocks down 25 million bushels due to an equal increase in projected exports. Global coarse grain supplies for 2013/14 are projected 1.4 million tons higher, with higher corn production for China.

The season-average U.S. farm price for corn was narrowed 5¢ on both ends of the range, to $4.25 to $4.75/bushel. That would put the 2014 average price $21.14-$2.64/bushel less than the 2013 average.

U.S. soybean supply and use projections for 2013/14 include higher imports and exports, reduced crush and reduced ending stocks compared with last month’s report. Soybean exports are raised 20 million bushels to a record 1.53 billion bushels, reflecting continued strong sales and shipments through February. Soybean stocks are projected at 145 million bushels, down 5 million from last month.

Global oilseed supplies, exports and ending stocks for 2013/14 were projected lower. Brazil soybean production was projected at 88.5 million tons, down 1.5 million bushels, reflecting hot, dry weather in the south.

Soybean and soybean product prices were all projected higher this month. The season-average

price range forecast for soybeans was raised 25¢ on both ends of the range, to $12.20-$13.70/bushel. Soybean meal prices were projected at $450-$490/ton, up $25 at the midpoint.

 

Feed price* outlook

 

 

 

Estimated

Estimated

Forecast

Product

2011/12

2012/13

2013/14    

Corn ($/bu.)

6.22

6.89

4.25-4.75

Soybeans ($/bu.)

12.5

14.4

12.20-13.70

Soy meal ($/ton)

394

468

450-490

*U.S. average price paid at the farm level

Source: USDA World Ag Supply & Demand

Estimates report, March 10, 2014

 



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