The USDA’s monthly World Ag Supply and Demand Estimates (WASDE) report, released Aug. 12, 2022, revised 2022-23 U.S. milk production estimates higher due to larger cow inventories and increases in milk output per cow. Projected average all-milk prices were lowered for both years.
- Compared to last month, the USDA raised the 2022 milk production forecast by 800 million pounds, to 226.8 billion pounds. If realized, 2022 production would be up 500 million pounds from 2021.
The 2022 butter price forecast was raised from last month on current price strength, but the cheese price was forecast lower on larger supplies and continued large stocks. The price forecasts for nonfat dry milk (NDM) and whey prices were also lowered.
Compared to a month ago, the projected 2022 annual average Class III price was reduced $1.20, to $21.60 per hundredweight (cwt). The projected Class IV price was cut 75 cents, to $23.95 per cwt. The 2022 all-milk price forecast was cut 95 cents from last month to $25.20 per cwt. (As of the close of trading on the Chicago Mercantile Exchange on Aug. 11, 2022, Class III and Class IV milk futures prices would average $21.97 and $23.79 per cwt, respectively.)
- For 2023, the USDA projected milk production at 229.2 billion pounds, 900 million pounds more than last month’s forecast. If realized, 2023 production would be up about 1% from the 2022 estimate.
The 2023 price forecasts for cheese, butter, NDM, and whey are all lowered on expectations of greater supplies and strong competition in international markets. With lower product prices, the Class III milk price was forecast at $19.70 per cwt, down $1.15 from last month’s projection. The Class IV milk price was forecast $1.95 lower to $20.35 per cwt. The all-milk price was forecast $1.65 lower to $22.50 per cwt. (As of the close of CME trading on Aug. 11, the 2023 Class III and Class IV milk futures prices would average $19.57 and $19.71 per cwt, respectively.)
Beef production, price outlook
The 2022 beef production estimate was raised for the second half of the year with higher expected slaughter. The beef forecast was raised for 2023, reflecting higher expected placements in late 2022.
The 2022 cattle price forecast was raised slightly from last month. The USDA estimated 2022 annual average prices for fed cattle at about $142 per cwt, almost $20 more than the 2021 average of $122.40 per cwt. The estimated 2023 annual average price for fed cattle was $154 per cwt, up $1 from last month’s forecast.
Feed price, production forecasts
The WASDE and Crop Production reports provided some updated feed supply and demand estimates and price projections:
- Corn: This month’s 2022-23 U.S. corn outlook called for lower supplies, reduced feed and residual use, slightly higher food, seed and industrial use, smaller exports and lower ending stocks.
Area harvested for grain was forecast at 81.8 million acres, down less than 1% from the previous forecast and down 4% from last year. Corn production for 2022 was forecast at 14.4 billion bushels, down 5% from 2021 but still the fourth-highest production total on record. The season’s first survey-based corn yield forecast, at 175.4 bushels per acre, is 1.6 bushels below last month’s projection. Among the major producing states, the Crop Production report forecast yields above a year ago in Illinois, Minnesota and South Dakota; below a year ago in Indiana, Missouri, Nebraska and Ohio; and unchanged in Iowa.
At $6.65 per bushel, the projected season-average corn price received by producers was unchanged from last month’s forecast, but it was still up 70 cents (12%) from the 2021-22 average of $5.95 per bushel and about $2.12 (47%) more than 2020-21 average of $4.53 per bushel.
- Soybeans: The 2022-23 U.S. soybean supply and use outlook projected higher beginning stocks, production, exports and ending stocks compared to a month ago.
Soybean production for 2022-23 was forecast at 4.53 billion bushels, up 26 million bushels from the July forecast, with higher yields more than offsetting lower harvested area. Harvested area was forecast at 87.2 million acres, down 0.3 million acres from July but up 1% from 2021. The first survey-based soybean yield forecast of 51.9 bushels per acre was raised 0.4 bushels from last month.
The U.S. season-average soybean price for 2022-23 was forecast at $14.35 per bushel, down 5 cents from last month, but $1.05 (8%) more than the $13.30 per bushel average for 2021-22 and $3.55 (33%) more than the $10.80 per bushel average in 2020-21.
The 2022-23 soybean meal price was projected at $390 per ton, unchanged from last month’s forecast and down $45 (10%) from the $435 per ton average in 2021-22 and $2.30 (0.6%) less than the average for 2020-21.
- Hay: Production of alfalfa and alfalfa mixture dry hay for 2022 was forecast at 49.1 million tons, down less than 1% from 2021. Based on conditions as of Aug. 1, yields are expected to average 3.17 tons per acre, down 0.06 ton from last year. Harvested area is forecast at 15.5 million acres, unchanged from the June USDA Acreage report, but up 1% from 2021. Record-high yields are forecast in Idaho and Wyoming.
Production of other hay was forecast at 67.7 million tons, down 5% from 2021. Based on Aug. 1 conditions, the U.S. yield is expected to average 1.88 tons per acre, down 0.12 ton from last year. Harvested area was forecast at 36 million acres, unchanged from the Acreage report, but up 2% from 2021. Record-high yields are expected in California.
- Cottonseed: The U.S. 2022-23 cotton outlook called for the lowest production since 2009-10 – with the crop reduced by projected historically high acreage abandonment in the Southwest. As a result, the cottonseed harvest was estimated at just 3.8 million tons, down 1.5 million tons (28%) from 2021.
