USDA Drops 2023 All-Milk Price to $20.50, 2024 Predictions Fall Below $20
Milk prices have felt pretty lackluster throughout 2023, especially as feed prices, labor costs and inflation cut deeper into producers profit margins. Unfortunately, this trend is one farmers will continue to face throughout the remainder of the year and going into 2024.
In its May World Ag Supply and Demand Estimates report (WASDE), the USDA reduced the 2023 milk production forecast compared to the previous month. This is primarily due to a slower growth in milk per cow despite larger cow inventories. Currently, the U.S. annual milk production forecast sits at 228.6 billion lbs., down 100 million lbs. from last month.
Cheese and dry whey prices followed the downward slope. Fat-basis exports were lowered from the previous month, mainly on weaker butter and milkfat shipments, offset by stronger cheese. The skim-solids basis export forecast was pushed higher on stronger skim milk powder and cheese exports, but partly offset by weaker whey exports. Imports on a skim-solids basis were lowered from April 2023 on lower milk protein imports. Imports on a fat basis remained unchanged. Butter and nonfat dry milk prices were the outlier and was raised from last month based on strong demand.
Based on the negative changes in component prices, Class III prices followed suit. Price projections for Class III milk were cut to $17.75 per cwt., down 50 cents from April’s $18.25 forecast. Class IV prices, however, did see positive growth, climbing 20 cents to $18.30 per cwt. Currently, the projected 2023 all-milk price sits at $20.50 per cwt., down 15 cents from last month.
Looking ahead toward 2024, the Class III price forecast stands at $17.50 per cwt. while Class IV prices are predicted to be at $17.35 per cwt. Following the downward trend, the 2024 all-milk price prediction sunk below $20 and currently sits at $19.90 per cwt.
