U.S. Milk Production Projected Lower for 2016 – Mar…
According to the March USDA World Agricultural Supply and Demand Estimate (WASDE) report, the 2016 U.S. milk production projection was lowered on slower growth in milk per cow yields. 2016 projected milk production of 211.6 billion pounds was reduced by 0.3 billion pounds, reaching the lowest projection on record. 2016 projected production translates to a 1.4% increase from the 2015 production levels which is slightly below the ten year average growth rate.
Export forecasts were reduced for 2016 on both a milk-fat and a skim-solids basis as global supplies of dairy products remain large and international competition continues to increase. Import forecasts were increased on both a milk-fat and skim-solids basis as continued strength in the U.S. dollar is expected to keep the United States as an attractive market for dairy products. Expectations of a relatively wide spread between the U.S. and international butter prices will support increased butterfat imports while cheese imports are expected to continue to benefit from strong domestic demand.
Butter prices were raised for 2016 on strong domestic demand while whey prices were unchanged, however cheese and NFDM prices were reduced as supplies are expected to be large. The 2016 Class III price estimate was reduced by $0.50/cwt at the midpoint to $13.60-$14.20/cwt on lower cheese prices while the 2016 Class IV price estimate of $13.05-$13.75/cwt was unchanged at the midpoint as higher projected butter prices offset lower projected NFDM prices. The 2016 All-Milk price forecast of $14.95-$15.55/cwt was reduced by $0.40/cwt at the midpoint, remaining below 2015 forecasted prices on both ends of the forecast for the sixth consecutive month. The 2016 projected All-Milk price translates to a 10.7% reduction from 2015 price levels.
Export forecasts were reduced for 2016 on both a milk-fat and a skim-solids basis as global supplies of dairy products remain large and international competition continues to increase. Import forecasts were increased on both a milk-fat and skim-solids basis as continued strength in the U.S. dollar is expected to keep the United States as an attractive market for dairy products. Expectations of a relatively wide spread between the U.S. and international butter prices will support increased butterfat imports while cheese imports are expected to continue to benefit from strong domestic demand.
Butter prices were raised for 2016 on strong domestic demand while whey prices were unchanged, however cheese and NFDM prices were reduced as supplies are expected to be large. The 2016 Class III price estimate was reduced by $0.50/cwt at the midpoint to $13.60-$14.20/cwt on lower cheese prices while the 2016 Class IV price estimate of $13.05-$13.75/cwt was unchanged at the midpoint as higher projected butter prices offset lower projected NFDM prices. The 2016 All-Milk price forecast of $14.95-$15.55/cwt was reduced by $0.40/cwt at the midpoint, remaining below 2015 forecasted prices on both ends of the forecast for the sixth consecutive month. The 2016 projected All-Milk price translates to a 10.7% reduction from 2015 price levels.