The USDA’s monthly World Ag Supply and Demand Estimates (WASDE) report was released Nov. 9. The milk production forecast for 2023 is reduced from last month, as milk cow numbers were revised lower in the most recent Milk Production report, and the lower estimated numbers are carried into the fourth quarter forecast. Output in milk per cow is also slowed in the fourth quarter with slower-than-expected growth for the third quarter reported in the Milk Production report. The forecast for 2024 is reduced as the lower forecasts of milk cows and milk per cow for late 2023 are carried into the next year.
- At 227.1 billion pounds, the 2023 production forecast was lowered 500 million pounds from last month’s estimate. If realized, 2023 production would be up just 0.26% from 2022.
Recent gains in butter and nonfat dry milk prices have eroded more rapidly than previously expected, and the Class IV forecast for 2023 is reduced. Strength in whey demand supports a higher price forecast. The projected 2023 Class III price was raised 5 cents to $17.10 per hundredweight (cwt), but the 2023 Class IV price was lowered 5 cents to $19.20 per cwt. The projected all-milk price for 2023 was unchanged from last month at $20.70 per cwt.
- In its forecast for 2024, the USDA estimated milk production at 230 billion pounds, down 400 million pounds from a month earlier. If realized, 2024 production would be up about 1.28% from 2023. There’s an additional milking day in leap year.
For 2024, the price forecast for butter is reduced as prices continue to soften from late-2023 levels, but cheese, nonfat dry milk and whey prices are raised as lower milk production constrains production of those products. As a result, the projected Class III milk price was increased 50 cents to $17.70 per cwt, the Class IV price was raised 5 cents to $18.85 per cwt, and the all-milk price was raised 10 cents at $20.80 per cwt.
Beef outlook
Beef production forecast is lowered, with reduced steer and heifer slaughter more than offsetting higher expected cow slaughter and higher average dressed weights in the fourth quarter. For 2024, beef production was raised. Higher expected steer and heifer placements in the later part of 2023 and first part of 2024 will lead to higher marketing of fed cattle, particularly in the first half of 2024. In addition, cow and bull slaughter is raised from last month.
Cattle price forecasts for 2023 and 2024 are unchanged, although weaker prices in the first half of 2024 are offset by higher prices later in the year. The fed cattle price forecast for 2023 was estimated at $177.30 per cwt, with prices reaching $185 per cwt in the fourth quarter. The early forecast for 2024 was $185 per cwt.
According to American Farm Bureau Federation economist Bernt Nelson, cattle prices are up in 2023, but high market volatility and drought continue to push cattle farmers toward herd liquidation. Beef prices will approach record levels in 2024 and 2025. (Read: Cattle market volatility increasing risk for farmers, may lead to record beef prices)
Feed supply, price forecasts
The USDA’s Crop Production and WASDE reports provided potential insights into dairy feedstuff supplies and prices:
- Corn: This month’s 2023-24 U.S. corn outlook is for larger production, domestic use, exports and ending stocks.
Corn production was forecast at a record high at 15.2 billion bushels, up 1% from the previous forecast and up 11% from 2022. Up 1.9 bushels from the previous forecast and up 1.5 bushels from last year, yields are expected to average 174.9 bushels per acre. Area harvested for grain, forecast at 87.1 million acres, was unchanged from the previous forecast but up 10% from the last year. With supply rising more than use, corn ending stocks for 2023-24 were increased.
At $4.85 per bushel, the projected season-average corn price received by producers was lowered 10 cents from the November forecast but is down $1.69 (26%) from the 2022-23 average of $6.54 per bushel.
- Soybeans: The 2023-24 U.S. soybean outlook includes increased production and ending stocks.
Production was forecast at 4.13 billion bushels, up 1% from the previous forecast but down 3% from 2022. Based on conditions as of Nov. 1, yields are expected to average 49.9 bushels per acre, up 0.3 bushel from both the previous forecast and 2022. Area harvested was forecast at 82.8 million acres, unchanged from the previous forecast but down 4% from 2022.
The 2023-24 U.S. season-average soybean price received by producers was forecast at $12.90 per bushel, unchanged from last month’s forecast. It compares with an average price of $14.20 per bushel in 2022-23. Soybean meal prices were forecast to average $380 per ton, also unchanged from last month’s forecast but $71 (16%) less than the 2022-23 average of $452 per ton.
- Dry hay: The November Crop Production report did not update dry hay harvest estimates. The October report forecast 2023 production of alfalfa and alfalfa-mixture dry hay at 52.7 million tons, up 10% from 2022. Production of other hay was forecast at 70.1 million tons, up 8% from 2022.
- Cottonseed: As a predictor of cottonseed availability, all cotton production was forecast at 13.1 million 480-pound bales, up 2% from previous forecast, as lower yields in Texas offset gains elsewhere. All cotton area harvested is forecast at 8.02 million acres, unchanged from the previous forecast but up 10% from 2022. The cottonseed harvest estimate was also slightly higher at about 3.985 million tons, still the smallest total in more than two decades.
