In its October World Ag Supply and Demand Estimates (WASDE) report, the USDA raised its milk production forecast for 2023 to 227.6 billion lb., up slightly from last month on more rapid growth in milk per cow. If realized, milk production for 2023 would be up less than 0.5% compared to 2022. The forecast for 2024 remained unchanged from September.
The recent strength in butter prices and the expectations of continued firm demand supported an increase in the butter price for 2023. Currently, butter stands at $2.66 per lb., up 12 cents from September. For 2024, higher expected imports of butter supported a higher fat-basis import forecast. Butter prices for next year now stand at $2.65 per lb., jumping 10 cents.
Cheese prices did not fare as well with imports now forecasted lower. In turn, Class III milk prices will likely face added pressure. Currently, the 2023 cheese price sits at $1.77 per lb., down only 4 cents from last month but 34 cents lower from this time last year.
For 2024, lower cheese and milk protein imports resulted in a lower skim-solids import forecast. Exports in 2023 are reduced on both a fat basis and a skim-solids basis with lower expected sales of butter, nonfat dry milk (NDM), and dry whey. For 2024, weaker expected sales of butter and dry whey are reflected in lower fat basis and skim-solids basis export forecasts.
With lower cheese prices predicted, the outlook for 2023 Class III milk prices now stands at $17.05 per cwt, down 30 cents from September and nearly $5 from 2022. In contrast, the 2023 Class IV price forecast was raised 65 cents to $19.25 per cwt., but down $5.22 from last year. Projections for Class III prices in 2024 dropped to $17.20 while Class IV projections for 2024 jumped 80 cents to $18.80.
The all-milk price forecast for 2023 was raised 30 cents to $20.70 per cwt. Meanwhile, the 2024 all-milk price now sits at $20.55, up 25 cents.
