USDA’s March World Ag Supply & Demand Estimates (WASDE) report reduced 2016 U.S. milk production and marketing estimates slightly, but projected further milk price erosion, too.
Milk production and marketings were projected at 211.6 billion lbs. and 210.6 billion lbs., respectively, for 2016. Both are down about 300 million pounds from last month’s forecast. If realized, 2016 totals would be up about 1.4 percent from 2015 revised production and marketing estimates.
The lower milk production forecast is the result of a small decline in cow numbers, and slower growth in milk production per cow.
Fat and skim-solids basis export forecasts were reduced, while projected imports were increased due to the continued strength of the U.S. dollar, making the United States an attractive market, especially for butterfat.
The butter price forecast (see table, USDA dairy price forecasts) was raised as demand remains firm. Projected cheese and nonfat dry milk (NFDM) prices were reduced as supplies are expected to be large and, in the case of NFDM, international prices will remain under pressure from large global supplies. The whey price forecast was unchanged.
As a result, the 2016 projected Class III price was reduced on the lower cheese price. The projected Class IV price was narrowed but unchanged at the midpoint, as the higher butter price offsets a lower NFDM price.
The all milk price forecast was lowered to $14.95 to $15.55 per cwt.
Feed situation steady
Projected 2015/16 U.S. feed grain ending stocks were unchanged.
Estimated corn for food, seed and industrial use was lowered slightly, reflecting a reduction in corn used in ethanol production.
The 2015/16 season-average corn price received by producers was narrowed to $3.40-$3.80/bushel (see table, USDA feed price outlook).
U.S. soybean ending stocks for 2015/16 were projected at 460 million bushels, up 10 million from last month. Soybean trade projections were unchanged. Soybean meal imports were raised slightly, partly offsetting lower meal production.
The projected 2015-16 soybean price received by producers was narrowed, at $8.25-$9.25/bushel. Soybean meal price projections were lowered slightly on the top end, at $270-$300/ ton.
Beef outlook
Impacting cull cow prices, the first-quarter 2016 beef production estimate was reduced, due to a slower slaughter pace and slightly lighter carcass weights. Projected 2016 steer prices were unchanged from last month, at $133-$142/cwt. That compares to $148/cwt. in 2015. Prices are expected to peak in the second quarter.
See the full World Ag Supply & Demand Estimates report here. PD
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Dave Natzke
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