Further reductions in milk production yield price bump
USDA lowered milk production estimates again for its 2021 and 2022 forecast because of expectations for lower cow numbers and milk per cow.
In its October supply and demand report, USDA raised cheese, nonfat dry milk, and whey prices for 2021 because of current prices and lower expected production. Butter was reduced slightly because of current prices. For 2022, all product prices were raised mostly because of tighter supplies.
This year and into next, the USDA is forecasting Class III and Class IV prices higher because of improving dairy product prices.
The 2021 all milk price forecast was raised 30 cents to $18.45 per hundredweight while 2022’s price increased 80 cents to $19.20.