According to the April USDA World Agricultural Supply and Demand Estimate (WASDE) report, 2014 U.S. milk production is projected at 206.1 billion lbs, up 0.4 billion lbs from last month’s report. Strong returns from milk production are expected to encourage a more rapid expansion in cow numbers and increased milk per cow. 2014 projected production of 206.1 billion lbs equates to a 2.4% YOY increase from 2013 production of 201.2 billion lbs. The projected 2.4% YOY increase in milk production is over triple the 2013 YOY milk production increase. 2013 milk production of 201.2 billion lbs resulted in a 0.4% YOY increase and a 0.7% YOY increase when adjusting for leap year. 2014 YTD (Jan-Feb) milk production is up 1.1% YOY; implying YOY milk production growth is expected to accelerate in future months. Product price forecasts for cheese, butter, and whey were higher in the April ’14 report, supported by strong demand and price strength to date. The NFDM price was unchanged as export demand fell below expectations. Class III and Class IV prices were raised on higher product prices and, as shown in the chart below, the all-milk price forecast increased to the highest figures since the 2014 projections originated in May ’13, to $22.55-$23.05 per cwt.