The USDA’s monthly World Ag Supply and Demand Estimates (WASDE) report was released Feb. 8.
Milk production, prices
The milk production forecast for 2024 was lowered from last month due to lower expected output per cow, which is somewhat surprisingly partly offset by higher cow inventories.
Read: 2024 starts with fewer dairy cows, replacement heifers
- At 226.6 billion pounds, the 2023 milk production estimate was unchanged from last month’s report and would be virtually unchanged from 2022’s total of 226.5 billion pounds.
Based on year-end prices, cheese, butter, nonfat dry milk (NDM) and dry whey prices were unchanged. The projected 2023 Class III price was unchanged at $17.02 per hundredweight (cwt). The 2023 Class IV price forecast was also unchanged at $19.12 per cwt. The projected all-milk price for 2023 was lowered 12 cents to $20.48 per cwt.
- In its forecast for 2024, the USDA estimated milk production at 228.2 billion pounds, down 100 million pounds from a month earlier. If realized, 2024 production would be up about 0.7% from 2023. There’s an additional milking day in leap year.
Based on recent price strength, the 2024 cheese, butter, nonfat dry milk and whey price forecasts were all raised. Compared to a month ago, the projected Class III milk price was raised a dollar to $17.10 per cwt; the Class IV price was raised 85 cents to $20.20 per cwt based on higher product prices. The all-milk price was raised 95 cents to $20.95 per cwt.
Beef outlook
For 2024, the beef production forecast was raised from last month. Slower paced cattle slaughter lowered the production estimate for the first half of the year, while the forecast for steer and heifer slaughter was raised during the second half of the year, as the USDA’s January Cattle report implied a smaller decline in cattle outside feedlots than previously expected. As these cattle are placed on feed in the first half of the year, they will likely be marketed and slaughtered in the second half.
Cattle price forecasts are raised on expected strength in first-half demand for fed cattle in the face of tightening feedlot numbers. The fed cattle price forecast for 2024 was estimated at $180 per cwt, with prices reaching $184 per cwt in the fourth quarter. The 2023 average was $175.50 per cwt.
Feed supply, price forecasts
The USDA’s WASDE reports provided potential insights into dairy feedstuff supplies and prices:
- Corn: This month’s 2023-24 U.S. corn outlook called for lower food, seed and industrial use, and larger ending stocks. Corn used for glucose and dextrose was reduced 10 million bushels based on indicated usage to date. With no other use changes, U.S. corn ending stocks are up 10 million bushels from last month.
At $4.80 per bushel, the projected season-average corn price received by producers was unchanged from the January forecast but is down $1.74 (27%) from the 2022-23 average of $6.54 per bushel.
- Soybeans: This month’s 2023-24 U.S. soybean outlook called for lower soybean exports and higher ending stocks. Soybean exports are forecast at 1.72 billion bushels, down 35 million from last month, reflecting the slow pace of shipments through January and strong competition with Brazil.
The 2023-24 U.S. season-average soybean price received by producers was forecast at $12.65 per bushel, down a dime 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, unchanged from last month’s forecast but $72 less than the 2022-23 average of $452 per ton.
- Cottonseed: As a predicter of cottonseed availability, 2023-24 harvested cotton acreage was forecast at 10.2 million acres, down more than 3.5 million acres from 2022-23. Cotton production is set at 12.43 million 480-pound bales, down about 2 million bales from 2022-23. Based on average lint-seed ratios, that translates into lower cottonseed supplies.
The WASDE and February Crop Production reports did not contain information on hay production or prices. The latest USDA Ag Prices report indicated dairy-quality alfalfa hay prices averaged $275 per ton to end 2023, while all alfalfa hay prices averaged $205 per ton, the lowest average price since July 2021. Prices for other hay averaged $170 per ton.
The spread between U.S. average alfalfa and other hay prices – at more than $100 per ton last May and June – shrunk to $35 per ton in December, the slimmest gap since the first quarter of 2021.
