The milk production forecast for 2017 is raised from last month. Improved returns in 2017 are expected to result in a slightly higher forecast cow inventory during the late part of 2017.
Milk output per cow is also raised as improved returns are expected to support continued improvements in the quality of dairy rations.
Beginning stocks on both a fat and skim-solids basis are raised from last month on December 31 storage data; stocks at the end of 2017 are raised, reflecting increased beginning inventories and higher dairy product production in 2017.
Fat-basis imports are reduced as domestic butterfat is expected to be more competitive with the EU; skim-solids imports are unchanged. Fat basis exports are unchanged and skim-solids basis exports are raised slightly. Skim-solids imports are virtually unchanged as weaker exports of nonfat dry milk (NDM) are offset with stronger whey sales.
For 2016, milk production, output per cow, trade, and stock estimates are updated based on data through December.
Cheese and butter price forecasts are lowered as product production is expected to reflect higher forecast milk production and beginning stocks are relatively high.
The nonfat dry milk price forecast is unchanged, but the whey price is raised from last month on the strength of domestic and international demand.
The Class III price is raised as the higher whey price more than offsets the lower cheese price forecast.
The Class IV price is reduced as the butter price forecast is lowered.
The all milk price is forecast higher at $17.70 to $18.40 per cwt.