August 14, 2014
The USDA expects the All-Milk price for 2014 and 2015 to average above US$20/pound despite record milk outputs.
According to the agency in its World Agricultural Supply and Demand Estimates (WASDE) report, US milk production will reach an all-time high in both years.
The same report also anticipates US dairies to produce 212.5 billion pounds of milk in 2015. Lower feed costs are expected to support higher milk output per cow, USDA says.
USDA has lowered forecasts for US dairy exports for 2014 and 2015, saying "Russia's ban on imports from a number of dairy exporting countries will likely increase competition in export markets." The report also included higher estimates for butter and whey prices in 2014. USDA projects butter to average US$2.06/pound this year, and cheese at US$2.05/pound. Both are well above last year's levels.
The strength in butter prices is expected to carry into 2015, with USDA expecting an average price of US$1.72/pound, also above 2013 levels. For 2015, cheese, at an average of US$1.72, and nonfat dry milk, at US$1.64, are unchanged from July 2014.
In the meantime, USDA raised its estimates for 2014 Class III and Class IV prices on stronger component product prices. For 2014, USDA projects an average Class III price of US$21.35/pound. This year's Class IV price is expected to average US$22.50/pound, while the 2014 All-Milk price will average US$23.65.
Prices are predicted to soften in 2015, with Class II averaging US$17.50, Class IV at US$19.25, and the All-Milk price at US$20.25.
Elsewhere in the WASDE report, USDA forecasts corn production for 2014/2015 to reach a record of 14.032 billion bushels, with an average yield of 167.4 bushels/acre.
US soybean farmers is expected to harvest a record 3.816 billion bushels this year, compared with 3.8 billion bushels estimated in July.