The USDA’s monthly World Ag Supply and Demand Estimates (WASDE) report was released May 12. Compared to last month, the USDA reduced the U.S. 2023 milk production estimate slightly but also lowered Class III and all-milk price forecasts.
- At 228.6 billion pounds, the 2023 production forecast was cut by 100 million pounds from last month. A larger cow inventory is offset by slower growth in milk output per cow. If realized, 2023 production would be up less than 1% from 2022.
For 2023, projected annual average prices for cheese and dry whey were reduced, while prices for butter and nonfat dry milk were raised. As a result, the projected 2023 Class III price was cut 50 cents to $17.75 per hundredweight (cwt), while the Class IV price forecast was raised 20 cents to $18.30 per cwt. The projected 2023 all-milk price was cut 15 cents to $20.50 per cwt.
- In its initial look ahead to 2024, the USDA forecast milk production at 230.8 billion pounds, driven by gains in milk per cow and an additional milking day in leap year. If realized, 2024 production would be up less than 1% from 2023.
Next year's milk prices are projected lower: In 2024, the Class III price forecast is $17.50 per cwt, the Class IV price forecast is $17.35 per cwt, and the expected all-milk price is $19.90 per cwt.
Beef price forecast raised
For 2023, the beef production forecast was raised from last month based on recent slaughter data and larger first-half placements, supporting higher slaughter of steers and heifers in the second half. Cow slaughter was raised as well, as forage supplies remain tight despite some improvements in pasture conditions.
Beef production in 2024 is forecast lower with expected declines in both fed and non-fed cattle supplies.
Potentially affecting cull cow prices, the fed cattle price forecast for 2023 was estimated at $166.50 per cwt, up $2 from last month’s forecast. The early forecast for 2024 was estimated even higher at $175 per cwt.
Corn, soybean meal prices should decline
The USDA also provided potential insights into dairy feedstuff supplies and prices:
- Corn: This month’s WASDE 2023-24 U.S. corn outlook calls for larger production, greater domestic use and exports, and higher ending stocks. The corn crop is projected at a record 15.3 billion bushels, up more than 10% from last year on increases to both area and yield. Average yield is projected at 181.5 bushels per acre. With beginning stocks up slightly, total corn supplies are forecast at 16.7 billion bushels, the highest since 2017-18. At $4.80 per bushel, the projected season-average corn price received by producers is down $1.80 (27%) from the 2022-23 average of $6.60 per bushel.
- Soybeans: The 2023-24 U.S. soybean supply and use outlook forecasts higher supplies, crush and ending stocks, and lower exports compared with 2022-23. The soybean crop is projected at 4.51 billion bushels, up 5% from last year’s crop mainly on higher yields. With lower beginning stocks partly offsetting increased production, soybean supplies are forecast at 4.75 billion bushels, up 4% from 2022-23.
Soybean and soybean meal prices are all forecast lower for 2023-24. The 2023-24 U.S. season-average soybean price is forecast at $12.10 per bushel compared with $14.20 per bushel in 2022-23. Soybean meal prices are forecast at $365 per ton, down $90 from 2022-23.
Hay inventories near record low
Released simultaneously with the WASDE report, the USDA’s monthly Crop Production report also provided an estimate of hay inventories stored on farms.
With a new harvest season getting underway, hay inventories stored on U.S. farms as of May 1 were about 13% lower than a year earlier. Among major dairy states, hay inventories were estimated about 7% lower than on May 1, 2022, according to the USDA’s Crop Production report, released May 12.
As of May 1, 2023, all hay stored on U.S. farms was estimated at 14.5 million tons, down 2.24 million tons from the same date a year ago and the second-lowest amount stored on farms as of May 1 since records began in 1950.
Among the 24 major dairy states, on-farm hay inventories on May 1 were estimated at 9.06 million tons, down 701,000 tons from May 1, 2022.
There was a wide variation among individual dairy states and regions. In the Midwest, Minnesota and South Dakota hay inventories were up 240,000 tons and 160,000 tons compared to a year earlier but down 340,000 tons in Iowa. Hay inventories were also much smaller in Texas (-550,000 tons) and Colorado.
