WASDE: More Milk Production Despite Fewer Cows

The milk production forecast for 2017 and 2018 is raised on a slightly more rapid pace of growth in milk per cow. However, forecast cow numbers for late 2017 and 2018 are slightly lower.

Fat basis imports for 2017 and 2018 are raised on strength in butter imports but skimsolids imports are lowered for 2017 and unchanged for 2018.

Exports on a fat basis are raised for 2017 on stronger butter and cheese exports, and increased sales of butter and anhydrous milkfat are expected to support higher fat basis exports in 2018. Skim-solids exports for 2017 and 2018 are raised, primarily on stronger expected shipments of whey products.

For 2017, butter and nonfat dry milk (NDM) prices are lowered on large supplies, but the whey price is unchanged at the midpoint and the cheese price forecast is raised on current demand strength.

For 2018, continued demand strength for cheese is reflected in a higher price forecast, while butter, NDM, and whey prices are lowered on larger supplies and pressure from international prices.

The Class III price is raised for 2017 on stronger cheese prices, but for 2018, lower whey prices are expected to more than offset the increases in cheese prices, and the price forecast is lowered. The Class IV price is lowered for both years due to lower forecast butter and NDM prices.

The 2017 all milk price forecast range is $17.75 to $17.85 per cwt, unchanged at the midpoint, but the 2018 price is lowered to $17.45 to $18.35 per cwt.

Note: This report comes from the October 12, 2017 World Agricultural Supply and Demand Estimates by USDA.