USDA issued its World Agricultural Supply and Demand Estimates on July 12. Milk production forecasts for 2022 and 2023 are lowered from last month due to slower expected growth in milk per cow. USDA’s Cattle report, to be released July 22, will provide a mid-year estimate of the dairy cow inventory and producer intentions regarding retention of heifers for dairy cow replacement.
Imports on a fat basis are raised for 2022 on stronger expected imports of butterfat containing products and several other dairy products, but imports on a skim solids-basis are unchanged. No changes are made to the 2023 import forecasts of fats and skim-solids. Exports on both a skim-solids and a fat basis are also raised for 2022, reflecting stronger expected exports of butter, cheese, whey, skim milk powder, and lactose. The forecast for 2023 fat-basis exports is unchanged from last month but is raised on a skim solids-basis with expectations of higher skim milk powder exports carrying into 2023.
The 2022 butter price forecast is raised from last month on firm demand, and the cheese price forecast is lowered on continued large stocks. The forecasts for nonfat dry milk (NDM) and whey prices are unchanged. With a lower cheese price, the Class III price is lowered while the Class IV price is raised due to higher butter prices. The all milk price for 2022 is lowered to $26.15 per cwt.
For 2023, forecasts for cheese, butter, and NDM are raised on expected lower production, but the price forecast for whey is lowered on expected weaker international prices. With higher cheese, butter prices, and NDM prices, the Class III and Class IV price forecasts are raised. The 2023 all milk price forecast is raised to $24.15 per cwt.