WASDE: 2014 milk production forecast unchanged; 2015 higher

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USDA’s 2014 milk production estimate is unchanged from last month, but 2015 milk production is forecast higher, as lower feed costs and strong milk prices are expected to support both herd expansion and gains in milk per cow. According to USDA’s May 9 World Ag Supply & Demand Estimates report:

  • 2014 milk production and marketings were projected at 206.1 billion lbs. and 205.2 billion lbs., respectively, unchanged from a month ago. If realized, 2014 production and marketings would be up about 2.4% from 2013.
  • 2015 production and marketings were projected at 212.1 billion lbs. and 211.1 billion lbs., respectively. If realized, 2015 production and marketings would be up about 2.9% from 2014.

2014 fat-basis imports are forecast lower, while skim-solids imports are higher. Exports are raised on stronger sales of NDM, butterfat and cheese.

2015 fat-basis exports are forecast lower on increased competition from traditional exporters, primarily in butterfat markets. Continued strength in nonfat dry milk (NDM) will help limit declines in skim-solids exports. Fat-basis import forecasts are expected to be about the same as 2014, but skim-solids imports will be lower.

Projected 2014 butter and whey prices (see table) were raised from last month, while NDM is lower. Cheese is unchanged, but the range is narrowed. The projected Class III price was raised on higher whey prices, and Class IV is up as higher prices for butter more than offset reduced prices for NDM.

The 2014 all milk price is forecast to average $22.70-$23.00/cwt., falling to $19.70-$20.70/cwt. for 2015.

Beef prices

Affecting cull cow prices, May beef steer price projections for 2014 were lowered slightly from April’s estimate, to a range of $143-$149/cwt. Second-quarter 2014 prices are anticipated to be the highest of the year. The lower price forecast comes despite expectations of less beef production, as a declining beef cattle inventory and potential heifer retention during late 2014 and into 2015 is expected to limit cattle placements in late 2014 and into 2015. Thus, despite expectations of heavier slaughter weights, tight supplies of fed cattle for slaughter and reduced cow slaughter will result in lower beef production.

USDA’s initial projections for 2015 steer prices indicate an average in a range of $145-$157/cwt. Lower U.S. beef production is expected to push beef exports lower and imports higher in 2015. Total U.S. red meat and poultry production in 2015 is projected to be above 2014, as higher pork and poultry production more than offsets continued declines in beef production.

The 2013 steer price was estimated in at $125.89/cwt.

 

USDA dairy price forecasts 

 

 

 

 

Estimated

Estimated

Forecast

Forecast

Product   

2012

2013

2014

2015

Class III ($/cwt)

17.44

17.99

20.55-20.85

16.90-17.90

Class IV ($/cwt)

16.01

19.05

21.25-21.65

18.55-19.65

All milk ($/cwt)

18.52

20.05

22.70-23.00

19.70-20.70

Cheese ($/lb.)

1.7076

1.7683

1.995-2.025

1.670-1.770

Butter ($/lb.)

1.5943

1.5451

1.800-1.860

1.615-1.745

NFDM ($/lb.)

1.3279

1.7066

1.830-1.860

1.605-1.675

Dry whey (¢/lb.)

59.35

59.02

63.0-65.0

55.0-58.0

Source: USDA World Ag Supply & Demand

 

 

Estimates report, May 9, 2014

 

 

 

 

 

 

 

 

USDA feed price* outlook

 

 

 

 

Estimated

Estimated

Forecast

Forecast

Product

2011/12

2012/13

2013/14    

2014/15

Corn ($/bu.)

6.22

6.89

4.50-4.80

3.85-4.55

Soybeans ($/bu.)

12.50

14.40

13.1

9.75-11.75

Soy meal ($/ton)

394

468

485

355-395

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

 

 

Source: USDA World Ag Supply & Demand

 

 

Estimates report, May 9, 2014

 

 

 

 

Feed situation

On the feed side of the dairy equation, USDA’s World Ag Supply & Demand Estimates report presented USDA’s initial assessment of U.S. and world crop supply and demand prospects and U.S. prices for 2014/15. Because spring planting is still underway in the Northern Hemisphere and remains several months away in the Southern Hemisphere, the projections are highly tentative.

U.S. feed grain supplies for 2014/15 are projected at a record 403.3 million tons, up 2% from 2013/14, mostly on larger corn beginning stocks.

Corn production is projected at 13.9 billion bushels, up slightly from the 2013/14 record, with higher expected yields more than offsetting the year-to-year reduction in planted area. The corn yield is projected at 165.3 bushels per acre, up 6.5 bushels from 2013/14, based on a weather-adjusted yield trend model and assuming normal mid-May planting progress and summer weather.

Corn supplies for 2014/15 are projected at a record 15.1 billion bushels, up 330 million from 2013/14.

U.S. corn use for 2014/15 is projected 2% lower than in 2013/14. Feed and residual use is projected 50 million bushels lower, with animal numbers down from 2013/14. Exports are projected 200 million bushels lower than this month’s higher projection for 2013/14 as larger expected foreign supplies and lower import demand limit U.S. shipments.

Corn used to produce ethanol in 2014/15 is expected to be unchanged on the year with gasoline consumption expected to remain flat in 2015.

Corn ending stocks are projected at 1.7 billion bushels, up 580 million from the 2013/14 projection. With the larger carryout, the season-average farm price (see table) is projected at $3.85-$4.55/bushel, down from $4.50-$4.80/bushel for 2013/14.

U.S. oilseed production for 2014/15 is projected 11% higher, with soybean production accounting for most of the jump. Soybean production is projected at a record 3.635 billion bushels, up 346 million from the 2013 crop on record yields and harvested area. Yield is projected at a trend level of 45.2 bushels per acre, up 1.9 bushels from 2013. Supplies are projected at 3.78 billion bushels, up 7.4% from 2013/14 as a larger crop more than offsets lower beginning stocks and imports.

The U.S. soybean crush for 2014/15 is projected at 1.715 billion bushels, up 20 million from 2013/14 mainly reflecting increased domestic soybean meal consumption. Despite lower prices, soybean meal exports are projected up only slightly, with Argentina soybean meal exports accounting for most of the gains in global soybean meal trade. U.S. soybean exports are projected at 1.625 billion bushels, up 25 million from 2013/14 on record supplies and competitive prices.

Despite gains in use, ending stocks for 2014/15 are projected at 330 million bushels, up 200 million from 2013/14, increasing the stocks-to-use ratio to 9.6%.

The U.S. season-average soybean price for 2014/15 is forecast to decline to $9.75-$11.75/bushel, compared with $13.10/bushel in 2013/14. Soybean meal prices are forecast at $355-$395/ton, compared with $485/ton for 2013/14.

Hay stocks mixed in major dairy states

Nationally, U.S. farmers entered the 2014 growing season with more hay in storage than a year ago, but that's not the case in several major dairy states, according to USDA’s Crop Production report also released May 9.

All hay stored on United States farms May 1, 2014 totaled 19.2 million tons, up 35% from a year ago. While up from last tear, this is the third lowest May 1 stocks level since 1989.

May 1 hay stocks levels were record lows in California, Maine, Minnesota, New Hampshire, Pennsylvania and Rhode Island. In addition to California, Minnesota and Pennsylvania, other major dairy states reporting lower stocks compared to last year were Colorado, Idaho, New Mexico, Oregon and Texas. Read more

The first U.S. cotton projections for 2014/15 include larger production, which should yield higher volumes of cottonseed.



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