USDA is finally calling for milk production to decline albeit slightly as farmers slow output from the increasing cow herd.
In its March supply and demand report, USDA forecast butter, nonfat dry milk, and whey prices higher while calling for improved domestic and export demand. Cheese prices were left unchanged as weaker prices in the first half of this year offset expectations for improved demand in the second half. Higher product prices are also leading to improved Class III and Class IV prices.
The 2021 all milk price forecast was raised 20 cents to $17.75 per hundredweight.
The 2021 fat basis export estimate was increased on higher butterfat shipments more than offsetting lower cheese exports. The skim-solids basis export forecast was lowered because of reduced lactose shipments partly offset by higher exports of skim/nonfat milk powder.