Declining milk production lends itself to higher prices
USDA has again lowered its 2021 and 2022 milk production estimates because of expectations for lower cow numbers and milk per cow.
In its September supply and demand report, USDA raised butter, cheese, and nonfat dry milk for 2021 and 2022 because of improving demand and lower production. The whey price was unchanged.
This year and into next, the USDA is forecasting Class III and Class IV prices to rise because of higher dairy product prices.
The 2021 all milk price forecast was raised 20 cents to $18.15 per hundredweight while 2022’s price increased 55 cents to $18.40.