USDA expects higher milk production, continued strong demand
The USDA’s latest supply and demand report expects more milk production this year thanks to higher-than-expected cow numbers, but looking ahead to 2021, USDA expects fewer cows but more milk. Analysts say stronger milk production per cow is expected in 2021.
USDA raised the fat basis export forecast from last month on recent trade data and stronger expected global demand. The fat basis import forecast also went up because of stronger expected imports of cheese. On a skim-solids basis, USDA raised its 2020 export predictions based on stronger global demand for skim milk powder, whey products, and a number of dairy products, while the import forecast is raised based on increased cheese and milk protein products imports.
Cheese and whey prices went up from last month resulting in a higher Class III price forecast, but butter and powder prices were lowered from last month resulting in a lower Class IV price forecast. USDA’s new 2020 all milk price is forecast at $14.55 per cwt.
USDA says they expect 2021 Class III and Class IV prices to go up with stronger product prices and they are expecting a 2021 all milk price of $15.00 per cwt.