USDA’s April World Ag Supply & Demand Estimates (WASDE) report raised 2016 U.S. milk production and marketing estimates slightly, but left projected milk prices mostly unchanged.
Milk production was projected at 211.8 billion lbs. for 2016, up about 200 million pounds from last month’s forecast. If realized, the 2016 total would be up about 1.5 percent from 2015.
The higher milk production forecast is the result of a slower reduction in the cow inventory, combined with growth in milk output per cow.
Fat-basis exports were raised on strong exports of butterfat-containing products, but strong imports of butterfat and cheese supported an increase in the fat-basis import forecast.
Based on the current pace of trade, the outlook for skim-solids exports and imports were lowered.
Butter and nonfat dry milk (NFDM) price forecasts were reduced from last month due to relatively large supplies and continued pressure from weak international prices (Table 1). Projected cheese and whey prices were unchanged at the midpoint, but the range was narrowed for cheese.
With no change made to cheese and whey, the projected Class III price was unchanged at the midpoint (Table 1). The Class IV price was lowered on lower butter and NFDM prices.
The 2016 all milk price forecast was unchanged at the midpoint, as stronger first-half prices are offset by lower prices in the second half of the year.
Beef outlook
Impacting cull cow prices, the 2016 beef production estimate was raised due to higher expected cattle slaughter and heavier carcass weights. As a result, projected 2016 steer prices were lowered $2 to $5 from last month at $131-$37 per hundredweight. That compares to $148/cwt. in 2015. Expectations are that 2016 prices peaked in the first quarter.
Feed situation
Driven by corn, 2015-2016 U.S. feed grain ending stocks were projected higher. Corn feed and residual use was projected lower, but corn used for ethanol production increased.
The 2015-2016 season-average corn price received by producers was lowered to $3.40-$3.70/bushel (Table 2).
U.S. soybean supply and use changes for 2015-2016 included higher exports, lower seed use and lower ending stocks.
Projected price ranges for soybeans and soybean meal were narrowed this month, but midpoints were unchanged.
See the full World Ag Supply & Demand Estimates report. PD
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Dave Natzke
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