In their October World Agriculture Supply and Demand Estimates report, USDA boosted both milk production and the 2019 all milk price forecast.
The milk production forecasts for 2018 and 2019 were increased from the previous month on a more rapid pace of growth in milk per cow, USDA reported. The dairy herd continues to grow and cow numbers are raised for 2019. USDA expects strength in butterfat and cheese imports.
However, the 2018 and 2019 skim-solids based imports are lower. USDA bumped 2018 fat basis exports higher for 2019 but made no change to the 2019 forecast. USDA increased 2018 and 2019 butter and whey price forecasts from the previous month on expected demand strength, but they lowered cheese price forecasts on continued large supplies. The NDM price forecast was unchanged.
The Class III price is lowered for 2018; but for 2019, higher whey prices are expected to more than offset the declines in cheese prices, and the Class III price forecast is raised, USDA noted. USDA increased Class IV price estimates for both years due to higher forecast butter prices. The 2018 all milk price forecast is unchanged at the midpoint at $16.35 to $16.45 per cwt, and the 2019 price is raised to $16.85 to $17.75 per cwt.