Dairy Report: USDA Pushes All Milk Forecasts Higher, Again

Dairy Report 071420
Ponderosa Dairy - Amanda Arata - Nevada ( Wyatt Bechtel )

USDA is pushing their price estimates for this year and next year's all milk price forecasts higher. In their World Agriculture Supply and Demand Estimates report, the agency noted the average Class III, Class IV and the all milk price would all be higher.

USDA saying the milk production forecast for this year is lowered from last month, saying it's largely on slower growth in milk per cow. But it says next year's production forecast is raised from last month on expectations of the dairy herd rebuilding and a recovery in growth in milk per cow.

It raised the all-milk price to $18.25 per cet. for this year. For next year, it's raised the price to $17.05 per cwt.

As we've been telling you, some dairy producers will likely receive a smaller milk check than they anticipated later this month. It will include a deduction larger than many milk producers have seen in years. The reason is because of the Producer Price Differential or PPD. 

According to Farm Journal's MILK, the June PPD price for the Central Federal Milk Marketing Order was a negative $7.51 cents per cwt. The Southwest June PPD is negative $7.62 cents per cwt. and the Upper Midwest is negative $3.81 cents. 

Economists expect the PPD to vary between negative $5 to $8, depending on the area where the producer lives for at least the months of June and July.