Dairy WASDE Update – Feb ’18
According to the February USDA World Agricultural Supply and Demand Estimate (WASDE) report, the 2018 U.S. milk production projection was reduced for the fourth consecutive month, finishing at the lowest projection on record. 2018 projected milk production of 218.7 billion pounds was reduced by 0.1 billion pounds on slower growth in milk per cow yields. 2018 projected milk production equates to a 1.5% YOY increase from 2017 production levels, consistent with ten year average figures.
2018 export and import forecasts were unchanged from the previous month on a milk-fat basis. On a skim-solids basis, the import forecast was raised slightly while the export forecast was also raised on strong global demand for dry products. 2018 projected dairy export volumes translated to 15.6% of total U.S. milk solids production while import volumes were equivalent to 3.7% of total U.S. milk solids production. 2018 projected net dairy trade of 11.9% is on pace to reach a four year high.
2018 butter and cheese price forecasts were lowered on slowing demand, while no changes were made to the annual dry whey and nonfat dry milk prices. The 2018 Class III price forecast of $14.20-$14.90/cwt was reduced by $0.10/cwt at the midpoint on lower cheese prices, finishing 10.0% below 2017 price levels, while the 2018 Class IV price forecast of $13.35-$14.15/cwt was reduced by $0.25/cwt at the midpoint on lower butter prices, finishing 9.3% below the 2017 Class IV price. The 2018 projected All-Milk price of $15.70-$16.40/cwt was reduced by $0.15/cwt from the previous month at the midpoint, finishing 9.1% lower YOY.
2018 export and import forecasts were unchanged from the previous month on a milk-fat basis. On a skim-solids basis, the import forecast was raised slightly while the export forecast was also raised on strong global demand for dry products. 2018 projected dairy export volumes translated to 15.6% of total U.S. milk solids production while import volumes were equivalent to 3.7% of total U.S. milk solids production. 2018 projected net dairy trade of 11.9% is on pace to reach a four year high.
2018 butter and cheese price forecasts were lowered on slowing demand, while no changes were made to the annual dry whey and nonfat dry milk prices. The 2018 Class III price forecast of $14.20-$14.90/cwt was reduced by $0.10/cwt at the midpoint on lower cheese prices, finishing 10.0% below 2017 price levels, while the 2018 Class IV price forecast of $13.35-$14.15/cwt was reduced by $0.25/cwt at the midpoint on lower butter prices, finishing 9.3% below the 2017 Class IV price. The 2018 projected All-Milk price of $15.70-$16.40/cwt was reduced by $0.15/cwt from the previous month at the midpoint, finishing 9.1% lower YOY.