2021 Class III Milk Price Forecast Raised on Higher Cheese and Whey Prices

2021 Class III Milk Price Forecast Raised on Higher Cheese and Whey Prices

Preliminary data had October milk output at 18.5 billion pounds, down 0.5% from Oct. 2020. The latest Dairy Products report shows where the milk went, or didn’t.

Cheese output totaled 1.147 billion pounds, up 1.1% from September and 0.9% above October 2020. Year to date (YTD) output hit 11.3 billion pounds, up 3.1% from the same period in 2020.

Wisconsin produced 288.7 million pounds of the October total, up 0.3% from September but 2.7% below a year ago. California output, at 205.6 million pounds, was up 2.1% from September and 2.7% above a year ago. Idaho produced 85.1 million pounds, up 2.1% from September but 0.9% below a year ago.

Italian style cheese totaled 489.8 million pounds, up 0.8% from September and 3.5% above a year ago. American type cheese, at 457.5 million pounds, was up 2.0% from September but 0.6% below a year ago. Mozzarella totaled 377.8 million pounds, up 1.7% from a year ago.

Cheddar, the cheese traded at the CME, totaled 320.7 million pounds, up 12.2 million pounds or 4% from September but 4.7 million pounds or 1.4% below a year ago. YTD Cheddar stands at 3.3 billion pounds, up 3.3% from 2020.

Churns gave us 159.4 million pounds of butter, up 16 million pounds or 11.2% from September, but 2.6 million pounds or 1.6% below a year ago, as less milk was produced in the month and more went to the vat than the churn. YTD butter output stands at 1.7 billion pounds, down 2.2% from 2020.

Yogurt output totaled 375 million pounds, down 3.0% from a year ago.

Dry whey totaled 78.2 million pounds, up 8 million pounds or 11.4% from September, and 3.1 million pounds or 4.0% above a year ago. YTD dry whey was at 768.9 million pounds, down 4.0% from a year ago. Stocks fell to 58.1 million pounds, down 5.2 million or 8.2% from September and 11 million pounds or 15.9% below those a year ago.

Less milk meant less powder. Nonfat dry milk output totaled 124.7 million pounds, up 5.5 million pounds or 4.6% from September but down 16.6 million or 11.7% below a year ago. Powder YTD totaled 1.7 billion pounds, up 3.9%. Stocks fell to 221.8 million pounds, down 42.5 million pounds or 16.1% from September and were down 13.7 million pounds or 5.9% below those a year ago.

Skim milk powder production amounted to 58.3 million pounds, down 4.9 million pounds or 7.7% from September and down 5 million pounds or 7.9% below a year ago. YTD SMP, at 467.7 million pounds, is down 19.3% from 2020.

The Agriculture Department lowered its estimate for both 2021 and 2022 milk production in the latest World Agricultural Supply and Demand Estimates (WASDE) report, sixth month in a row, again citing lower expected dairy cow numbers and slower growth in milk per cow.

2021 production and marketings were estimated at 226.2 and 225.2 billion pounds respectively, down 200 million pounds on production from last month’s estimates and 100 million pounds lower on marketings. If realized, 2021 production would still be up 3.0 billion pounds or 1.3% from 2020.

 

Source: Lee Mielke/Farmers Advance

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