Dairy WASDE Update – Mar ’21
According to the March USDA World Agricultural Supply and Demand Estimate (WASDE) report, the 2021 milk production projection was reduced one million pounds from the previous month as slower expected growth in milk per cow yields is expected to more than offset higher than expected dairy cow numbers. 2021 projected milk production equates to a 2.1% YOY increase from 2020 levels, which would remain at a seven year high growth rate.
The 2021 dairy export forecast was raised on a milk-fat basis as higher expected shipments of butterfat are expected to more than offset lower forecasted cheese exports. The 2021 dairy export forecast on a skim-solids basis was reduced from the previous month as lower projected lactose shipments are expected to more than offset higher exports of skim milk powder/nonfat dry milk. 2021 dairy import forecasts were reduced on a milk-fat basis on lower expected imports of butterfat, while remaining unchanged on a skim-solids basis.
2021 projected dairy export volumes translated to 17.2% of total U.S. milk solids production, up 0.6% from the record high level experienced throughout 2020, while import volumes were equivalent to 3.6% of total U.S. milk solids production, down slightly from the previous year. 2021 net dairy trade is projected to reach a record high level for the second consecutive year.
2021 butter, dry whey and nonfat dry milk price forecasts were raised from the previous month on expectations of improvements in both domestic and export demand. The 2021 cheese price forecast was unchanged from the previous month as weaker prices in early 2021 are expected to offset improved demand experienced later in the year.
The 2021 Class III milk price forecast of $16.75/cwt was raised $0.15/cwt from the previous forecast but remained 7.8% below the previous year price level. The 2021 Class IV milk price forecast of $14.45/cwt was reduced $0.75/cwt from the previous forecast, finishing 7.1% above the previous year price level. The 2021 All-Milk price forecast of $17.75/cwt was raised $0.60/cwt from the previous forecast but remained 3.1% below the 2020 price level, reaching a three year low level.