Released on Feb. 9, the WASDE report revised the 2021 milk production estimate up 100 million pounds to 226.3 billion pounds, up about 1.4% from 2020. Looking into 2022, milk production was forecast at 227.2 billion pounds, down 500 million pounds from last month’s forecast. If realized, 2022 production would be up less than 0.4% from the 2021 estimate.
As a result of less milk and tightening stocks, 2022 price forecasts for cheese, butter, nonfat dry milk and whey were raised from last month. With higher product prices, milk prices forecasts followed suit.
For 2022, the projected Class III milk price was raised 65 cents from last month’s estimate to $20.30 per cwt. That would be up $3.22 from the 2021 average of $17.98 per cwt.
The projected annual average Class IV price was raised another $1.40 to $22.30 per cwt, up $6.21 from the 2021 average of $16.09 per cwt.
The projected all-milk price for 2022 was raised to $23.55 per cwt, up 95 cents from last month’s forecast and up $4.86 from the 2021 average of $18.69 per cwt.
Beef production, price estimates raised
The beef production estimate was raised from the previous month as larger expected placements during first half 2022 are marketed in the latter half of the year. However, the increase in fed cattle slaughter is partly offset by lower non-fed cattle slaughter.
Fed cattle price projections were raised for the second half of the year on firm packer demand. The USDA estimated 2022 annual average prices for fed cattle at about $137.50 per cwt, $15 more than the 2021 average of $122.40 per cwt.
Soybean and meal prices higher
The WASDE report also provided feed supply and demand estimates and cost projections:
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Corn: This month’s 2021-22 U.S. corn outlook was unchanged from last month. Foreign corn production estimates were lowered, mostly reflecting declines for Brazil and Paraguay that are partially offset by an increase for the Philippines. At $5.45 per bushel, the projected season-average corn price received by producers was also unchanged from last month. That would be about 92 cents (20%) more than 2020-21 average of $4.53 per bushel and $1.89 (53%) more than the 2019-20 average of $3.56 per bushel.
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Soybeans: The 2021-22 U.S. soybean supply and use outlook projected an increase in soybean crush and lower ending stocks. Soybean meal exports are reduced for Argentina, Brazil and Paraguay. The U.S. season-average soybean price for 2021-22 is forecast at $13 per bushel, up 40 cents from last month and $2.20 more than the average for 2020-21. The soybean meal price was projected at $410 per short ton, up $35 from last month and nearly $18 more than the average for 2020-21.
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Dave Natzke
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