USDA Lowers Its 2022-2023 All-Milk Price Forecast
More milk flowed during the summer months than expected, causing the USDA Economic Research Service to lower its all-milk price forecast for 2022 by 95 cents to $25.20 per cwt, and reduce its 2023 price forecast by $1.65 to $22.50 per cwt.
According to the USDA’s August Milk Production Report, milk production in the United States during July totaled 19.1 billion pounds, up 0.2% from July 2021. June production was revised to 18.975 billion pounds, also up 0.2% from June 2021.
Cow numbers totaled 9.42 million head in July 2022, 67,000 fewer head than July 2021, but up 1,000 head over June 2022. This, along with higher production per cow averaging 2,033 pounds in July, 19 pounds above July 2021, lead forecasters to lower their milk price predictions in the near future.
2022 Price Predictions
According to Michigan Farm Bureau, the U.S. milk production forecast for 2022 is 226.8 billion pounds, 0.8 billion lb. higher than last month’s forecast. Cheese and dry whey prices are predicted to drop, in-turn lowering the price paid for Class III milk. For 2022, the Class III milk price forecast has sunk to $21.60 per cwt, $1.20 lower than the previous month’s forecast. High butter prices but low butter stocks have caused the Class IV milk price projection for 2022 to drop $0.75 to $23.95 per cwt.
A Peak at 2023
Cow numbers are projected to rise in 2023, with the ERS raising 2023 milk cow inventory by 35,000 head to 9.435 million head. Milk production is also predicted to see a bump. The forecast for milk per cow is 24,300 pounds, 10 pounds higher than last month’s forecast. Total milk production in 2023 is now estimated to hit 229.2 billion lb., 0.9 billion lb. higher than last month’s forecast and 2.4 billion lb. above the 2022 forecast.
