Dairy WASDE Update – Mar ’18
According to the March USDA World Agricultural Supply and Demand Estimate (WASDE) report, the 2018 U.S. milk production projection was raised for the first time in the past five months, finishing at a three month high. 2018 projected milk production of 219.0 billion pounds was raised by 0.3 billion pounds on more rapid growth in milk per cow yields. 2018 projected milk production equates to a 1.6% YOY increase from 2017 production levels, slightly above ten year average figures.
2018 export forecasts were raised on both a milk-fat and skim-solids basis on stronger sales of cheese and whey products while 2018 import forecasts were reduced on both a milk-fat and skim-solids basis on slower sales of a number of processed dairy products. 2018 projected dairy export volumes translated to 15.7% of total U.S. milk solids production while import volumes were equivalent to 3.6% of total U.S. milk solids production. 2018 projected net dairy trade of 12.1% is on pace to reach a four year high.
2018 butter and cheese price forecasts were raised from the previous month on recent price strength however the nonfat dry milk price forecast was reduced on continued large supplies. No changes were made to the annual dry whey price forecast. The 2018 Class III price forecast of $14.30-$14.90/cwt was raised by $0.05/cwt at the midpoint on higher cheese prices but remained 9.7% below 2017 price levels. The 2018 Class IV price forecast of $13.25-$13.95/cwt was reduced by $0.15/cwt at the midpoint as lower nonfat dry milk prices more than offset higher butter prices, finishing 10.3% below the 2017 Class IV price. The 2018 projected All-Milk price of $15.75-$16.35/cwt was unchanged from the previous month at the midpoint, remaining 9.1% lower YOY.
2018 export forecasts were raised on both a milk-fat and skim-solids basis on stronger sales of cheese and whey products while 2018 import forecasts were reduced on both a milk-fat and skim-solids basis on slower sales of a number of processed dairy products. 2018 projected dairy export volumes translated to 15.7% of total U.S. milk solids production while import volumes were equivalent to 3.6% of total U.S. milk solids production. 2018 projected net dairy trade of 12.1% is on pace to reach a four year high.
2018 butter and cheese price forecasts were raised from the previous month on recent price strength however the nonfat dry milk price forecast was reduced on continued large supplies. No changes were made to the annual dry whey price forecast. The 2018 Class III price forecast of $14.30-$14.90/cwt was raised by $0.05/cwt at the midpoint on higher cheese prices but remained 9.7% below 2017 price levels. The 2018 Class IV price forecast of $13.25-$13.95/cwt was reduced by $0.15/cwt at the midpoint as lower nonfat dry milk prices more than offset higher butter prices, finishing 10.3% below the 2017 Class IV price. The 2018 projected All-Milk price of $15.75-$16.35/cwt was unchanged from the previous month at the midpoint, remaining 9.1% lower YOY.