USDA’s Nov. 10 World Ag Supply & Demand Estimates report raised projected 2014 milk production estimates due to growth in output per cow, but reduced estimates for 2015 as lower milk prices moderate expansion in cow numbers and growth in milk per cow next year.

  • 2014 milk production and marketings were projected 100 million lbs. higher, at 206.2 billion lbs. and 205.2 billion lbs., respectively. If realized, 2014 production and marketings would be up about 2.5% from 2013.
  • 2015 production and marketings were projected 500 million lbs. lower than the previous month’s forecast, at 212.3 billion lbs. and 211.3 billion lbs., respectively. If realized, 2015 production and marketings would be up about 3.0% from 2014.

Export forecasts for 2014 and 2015 were lowered, as U.S. dairy products, especially on a skim solids basis, remain less competitive in world markets.

Projected cheese and nonfat dry milk (NFDM) prices (see table) were raised for 2014, reflecting current price movements, but the price forecasts for 2015 are lowered as domestic supplies are expected to be relatively large. Butter prices were reduced for both 2014 and 2015 based on prices to date, and weaker expected exports. Whey prices are unchanged from last month.

The projected Class III milk price (see table) for 2014 was raised on stronger cheese prices, but weaker cheese prices in 2015 result in a lower expected Class III price.

The Class IV price was lowered for 2014, as lower butter prices more than offset a higher NFDM price. For 2015 both butter and NDM prices will be weaker, resulting in a lower Class IV price forecast.

The all milk price is raised to $24.15-$24.25/cwt. for 2014, but lowered to $18.85-$19.75/cwt. for 2015.

Beef prices steady

Affecting cull cow prices, November beef steer price projections for 2014 and 2015 were raised slightly from October’s estimates, based on continued demand strength. The 2014 annual average steer price is projected at $154.41/cwt., up $1.50/cwt. from a month ago. The 2015 average is projected in a range of $154-$165/cwt., up $3-$5/cwt. from last month's forecast.

Total 2014 beef production was forecast higher, but 2015 production estimates were reduced. Cattle feeders are expected to raise animals to heavier weights in 2014 and 2015, but this is more than offset by a slower pace of marketings in the second half of 2015. Higher beef prices are expected to encourage imports during the remainder of 2014, although the 2015 import forecast is unchanged from last month.

Feed situation

In addition to USDA’s WASDE report, the Nov. 10 Crop Production report also figures into the feed price outlook.

U.S. feed grain production for 2014/15 was lowered this month as lower corn, barley, and oats output more than offsets a small increase for sorghum. Corn production is forecast 68 million bushels lower, but still a record at 14.407 billion bushels. The national average corn yield is reduced 0.8 bushels per acre, to 173.4 bushels.

U.S. corn use for 2014/15 is projected slightly higher, with a 5 million bushel increase expected for food, seed and industrial (FSI) use. Corn used in ethanol production is projected 25 million bushels higher with the strong pace of weekly ethanol production reported so far for the marketing year. Projected corn ending stocks were lowered.

The projected range for the season-average farm corn price is raised 10¢ on each end, to $3.20-$3.80/bushel.

U.S. soybean production was forecast at 3.958 billion bushels, up 31 million bushels based on higher yields. The soybean yield is projected at a record 47.5 bushels per acre, up 0.4 bushels from last month, mainly on gains for Iowa and South Dakota.

Soybean supplies for 2014/15 are projected 1% above the October forecast. U.S. soybean exports for 2014/15 are raised 20 million bushels to 1.720 million bushels, reflecting the record pace of export sales through late October. Soybean crush is raised 10 million bushels to 1.780 billion bushels, mostly due to increased soybean meal exports. Domestic soybean meal consumption is reduced slightly in line with changes in the 2013/14 balance sheet. Soybean ending stocks are projected at 450 million bushels, unchanged from the previous forecast.

Soybean and soybean product prices for 2014/15 are unchanged from last month. The U.S. season-average soybean price range is projected at $9.00-$11.00/bushel. Soybean meal was projected at $330-$370/ton.

To see the full WASDE report, click here.

To see the full Crop Production report, click here.

USDA dairy price forecasts

 

 

 

Estimated

Forecast

Forecast

Product

2013

2014

2015

Class III ($/cwt)

17.99

22.50-22.60

17.15-18.05

Class IV ($/cwt)

19.05

22.05-22.25

17.05-18.05

All milk ($/cwt)

20.05

24.15-24.25

18.85-19.75

Cheese ($/lb.)

1.7683

2.170-2.180

1.690-1.780

Butter ($/lb.)

1.5451

2.120-2.150

1.660-1.780

NFDM ($/lb.)

1.7066

1.770-1.790

1.410-1.480

Dry whey (¢/lb.)

59.02

65.0-66.0

56.0-59.0

Source: USDA World Ag Supply & Demand

 

Estimates report, Nov. 10, 2014

 

 

 

 

 

 

USDA feed price* outlook

 

 

 

Estimated

Forecast

Forecast

Product

2012/13

2013/14

2014/15

Corn ($/bu.)

6.89

4.46

3.20-3.80

Soybeans ($/bu.)

14.40

13.00

9.00-11.00

Soy meal ($/ton)

468

490

3.30-3.70

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

 

Source: USDA World Ag Supply & Demand

 

Estimates report, Nov. 10, 2014