The USDA’s monthly World Ag Supply and Demand Estimates (WASDE) report, released Oct. 12, 2022, raised 2022-23 U.S. milk production estimates from last month’s forecast, but also strengthened milk price projections slightly. Adding information from the USDA’s Crop Production report on the feed side of the equation, the outlooks for corn and soybean meal prices were mixed, while hay and cottonseed production estimates were reduced.
Affecting production and milk marketings, estimated milk cow numbers were raised, reflecting a more rapid pace of expansion in late 2022 and the first half of 2023. Output per cow was raised for the remainder of 2022 and into the first part of 2023. By year:
- Compared to last month, the USDA raised the 2022 milk production forecast by 400 million pounds to 226.9 billion pounds. If realized, 2022 production would be up just 600 million pounds from 2021 and up just 1.6% from 2020.
For 2022, annual average price forecasts for cheese and butter were raised, with prices for nonfat dry milk (NDM) unchanged and dry whey reduced slightly. Compared to a month ago, the projected 2022 annual average Class III price was raised 25 cents to $21.90 per hundredweight (cwt). The projected Class IV price was raised 15 cents to $24.60 per cwt. The 2022 all-milk price forecast was raised 15 cents from last month to $25.60 per cwt.
- For 2023, the USDA projected milk production at 229.2 billion pounds, 400 million pounds more than last month’s forecast. If realized, 2023 production would be up about 1% from the 2022 estimate.
For 2023, price forecasts for cheese and butter increased, with dry whey unchanged and NDM reduced. The projected Class III price was raised a dime to $19.80 per cwt, while the Class IV price forecast was raised 15 cents to $21 per cwt. The projected 2023 all-milk price was raised 20 cents to $22.90 per cwt.
Beef production, price outlook
The 2022 beef production estimate was raised for the second half of the year with higher expected slaughter and heavier carcass weights.
For 2023, the beef production forecast was raised, reflecting higher expected placements in late 2022, which will be marketed in the first half of 2023.
Potentially affecting cull cow prices, fed cattle price forecasts for 2022 were raised on current strength in demand. The USDA estimated 2022 annual average prices for fed cattle at about $143.15 per cwt, about $21 higher than the 2021 average of $122.40 per cwt. Highest prices for 2022 are forecast in the fourth quarter of the year.
The estimated 2023 annual average price for fed cattle was $154 per cwt, unchanged 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 reduced supplies, greater feed and residual use, lower exports and corn used for ethanol, and smaller ending stocks.
Corn production was forecast at 13.9 billion bushels, down 49 million bushels (less than 1%) from the previous forecast and down 8% from 2021. Area harvested for grain, forecast at 80.8 million acres, was unchanged from the previous forecast but down 5% from the previous year.
Based on conditions as of Oct. 1, yields are expected to average 171.9 bushels per harvested acre, down 0.6 bushel from the previous forecast and down 4.8 bushels from last year. Record-high yields are forecast in California, Illinois, Virginia and Wisconsin.
At $6.80 per bushel, the projected season-average corn price received by producers was raised 5 cents from last month’s forecast and is up 80 cents (13%) from the 2021-22 revised average of $6 per bushel and about $2.27 (50%) more than 2020-21 average of $4.53 per bushel.
- Soybeans: The 2022-23 U.S. soybean supply and use outlook projected lower production partly offset by higher beginning stocks. Soybean exports are reduced due to increased competition from South America. Estimated ending stocks were unchanged from last month’s forecast.
Acreage harvested for beans in 2022 was forecast at 86.6 million acres, unchanged from the previous forecast and up less than 1% from last year. Soybean production is forecast at 4.31 billion bushels, down 1% from the previous estimate and down 3% from last year. The forecast yield at 49.8 bushels per acre is down 4% from last year’s final estimate of 51.7 bushels per acre. Record-high yields are forecast in Arkansas, Mississippi and South Carolina.
The U.S. season-average soybean price received by producers for 2022-23 was forecast at $14 per bushel, down 35 cents from last month’s projections but still up 70 cents from 2021-22 and $3.20 more than the 2020-21 average.
The 2022-23 soybean meal price was projected at $390 per ton, unchanged from last month’s forecast and down $50 (11%) from the $440 per ton average in 2021-22 and $2.30 (0.6%) less than the average for 2020-21.
- Canola: For dairy producers incorporating canola in their rations, the first production forecast for 2022 is a record-high 3.95 billion pounds, up 45% from 2021 revised estimate. Production in both North Dakota and Washington will be the highest on record. Growers expect to harvest a record-high 2.16 million acres, up 3% from 2021. The October yield forecast at 1,826 pounds per acre is 524 pounds above last year’s yield and will represent the third-highest average yield on record.
- Hay: The USDA’s Crop Production report reduced hay production estimates for 2022. Production of alfalfa and alfalfa-mixture dry hay for 2022 was forecast at 48.8 million tons, down 1% from the August forecast and down 1% from 2021. Based on conditions as of Oct. 1 conditions, yields are expected to average 3.16 tons per acre, down 0.01 ton from the August forecast and down 0.07 ton from last year. Harvested area is forecast at 15.5 million acres, unchanged from last June’s USDA Acreage report but up 1% from 2021.
Production of other hay was forecast at 63.2 million tons, down 7% from the August forecast and down 11% from 2021. Based on Oct. 1 conditions, the U.S. yield is expected to average 1.75 tons per acre, down 0.13 ton from the August forecast and down 0.25 ton from last year. Harvested area is forecast at 36 million acres, unchanged from the Acreage report but up 2% from 2021.
- Cottonseed: Affecting cottonseed, the 2022 cotton production estimate was virtually unchanged from a month ago at 13.8 million bales. As a result, the cottonseed harvest was estimated at 4.195 million tons, down slightly from last month’s forecast and down 1.13 million tons (21%) from 2021. It would be the lowest cottonseed output since 2015.
