Production declines could yield $1 bump to milk prices
USDA is yet again calling for lower milk production 2021 and 2022 because of expectations for lower cow numbers and milk per cow.
In its November supply and demand report, USDA raised butter, nonfat dry milk, and whey prices for 2021 because of strength in demand and lower expected production. Cheese was reduced because of current prices and large supplies. The Class III price was reduced for 2021 as lower expected cheese prices are likely to more than offset higher whey prices. The Class IV price was raised because of higher nonfat dry milk and butter prices.
For 2022, all product prices were raised mostly because of tighter supplies and strengthening demand. Class III and Class IV prices next year were raised because of forecasted higher product prices.
The 2021 all milk price forecast was raised five cents to $18.50 per hundredweight while 2022’s price increased $1.05 to $20.25.