The July 11 supply/demand report forecasts 2014’s All-Milk price average at $23.40 per cwt., projects even more milk in 2015.
Although USDA lowered its 2014 U.S. milk production estimate slightly from last month, its new forecast of 205.9 billion pounds still would be a record high.
If U.S. dairies achieve USDA’s latest projection, released in Friday’s World Agricultural Supply and Demand Estimates (WASDE) report, their output would soar 4.7 billion pounds over 2013’s level. That’s close to what Arizona produces in an entire year. It would also exceed 2012’s milk production figure of 200.5 billion pounds by 5.4 billion pounds.
USDA also increased 2015 U.S. milk production to a record-high 212.4 billion pounds. That came as a surprise to Robin Schmahl, a commodity broker with AgDairy LLC in Elkhart Lake, Wis.
“I thought they would have left that unchanged [from 212.1 billion pounds in June’s WASDE report], but they pushed it higher,” Schmahl told Al Pell of Farm Journal Market Radio.
The WASDE report estimated this year’s dairy product prices at continuing strong levels. It pegged 2014’s All-Milk price at $19.75-$20.75 per cwt., for an average of $23.40. Class III prices are expected to average $21.15 this year, well above 2013’s $17.99.
USDA foresees weakening in Class III prices next year, projecting an average of $17.45 per cwt. in 2015.
The report estimated 2014 Class IV prices at $22.15 per cwt., well above last year’s $19.05. USDA expects Class IV prices to fall next year to an average of $19.25, down significantly from 2014’s levels.
The WASDE report also projected that corn and soybean supplies will increase substantially in 2014.
