USDA’s March 10 World Ag Supply & Demand Estimates report reduced 2015 milk production projections from last month, as slower growth in output per cow more than offsets faster herd expansion.

2015 production and marketings were projected about 400 million lbs. lower than the previous month’s forecast, at 211.1 billion lbs. and 210.1 million lbs., respectively. If realized, 2015 production would be up about 2.5%, with marketings up about 2.4% from 2014.

The outlook for both fat and skim-solids exports for 2015 were reduced, as export demand is hampered by a strong dollar and increased competition from other exporters. Fat-basis imports are higher on expectations of greater butterfat imports. However, robust domestic demand is expected to support increased product use.

Product price forecasts for butter and nonfat dry milk (NFDM) were raised, supported by demand and price strength to date (see table). Cheese prices are unchanged at the midpoint, but the range is narrowed. Whey is lower on weaker demand.

Compared to a month ago, the projected Class III price was lowered 35¢-45¢ (see table), based on reduced whey prices. The Class IV price was raised 10¢-20¢, due to higher NFDM prices and butter prices.

The 2015 all milk price was forecast at $17.05-$17.65/cwt., down 35¢-45¢ from last month’s projections.

 

USDA dairy price forecasts 

 

 

 

Estimated

Estimated

Forecast

Product   

2013

2014

2015

Class III ($/cwt)

17.99

22.34

15.95-16.55

Class IV ($/cwt)

19.05

22.09

15.30-16.00

All milk ($/cwt)

20.05

23.98

17.05-17.65

Cheese ($/lb.)

1.7683

2.155

1.600-1.660

Butter ($/lb.)

1.5451

2.136

1.670-1.760

NFDM ($/lb.)

1.7066

1.768

1.205-1.255

Dry whey (¢/lb.)

59.02

65.38

49.0-52.0

Source: USDA World Ag Supply & Demand

 

Estimates report, March 10, 2015

 

 

 

Beef prices: Little change

The 2015 forecast of total red meat and poultry production was lowered from last month, as lower beef production more than offsets increases in pork and broiler production. Fed cattle slaughter is expected to be lower in the first quarter, but cow slaughter remains higher than expected. In addition, carcass weights are reduced slightly in the first quarter.

The 2015 beef import forecast is higher than last month, as demand for processing grade beef remains strong, and strength of the dollar makes the United States an attractive market. Beef exports for 2015 are reduced due to relatively high U.S. prices and the strong dollar.

The 2015 projected cattle price was left unchanged. Projected beef steer prices for 2015 are $157-$167/cwt., with highest prices in the first half of the year.

 

Feed situation adjustments

The March report made no changes to the U.S. corn supply, but adjusted the demand side. Total production for the 2014/2015 crop year was 14.216 billion bushels. USDA increased feed and residual usage  and exports by 50 million bushels each, but lowered ethanol usage by 50 million bushels, for a net 50 million bushel increase in demand. That lowered projected ending stocks of U.S. corn to 1.777 billion bushels. The WASDE report projected range for the season-average corn farm price is $3.50-$3.90/bushel, up 10¢ on the bottom and up 5¢ at the midpoint.

The soybean balance sheet was left unchanged. Production was set at 3.969 billion bushels, with total demand pegged at 3.701 billion bushels, and ending stocks projected to be 385 million bushels. The U.S. season-average soybean price range for 2014/15 is projected at $9.45-$10.95/bushel; soybean meal is projected at $350-$390/ton. Both are unchanged from the previous month.

 

USDA feed price* outlook

 

 

 

Estimated

Estimated

Forecast

Product

2012/13

2013/14    

2014/15

Corn ($/bu.)

6.89

4.46

3.50-3.90

Soybeans ($/bu.)

14.40

13.00

9.45-10.95

Soy meal ($/ton)

468

490

350-390

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

 

Source: USDA World Ag Supply & Demand

 

Estimates report, March, 2015