Dairy WASDE Update – Feb ’20
According to the February USDA World Agricultural Supply and Demand Estimate (WASDE) report, the 2020 U.S. milk production projection was unchanged from the previous month, remaining at a four month low projected level. 2020 projected milk production equates to a 1.4% YOY increase from 2019 production levels, finishing equal to ten year average figures. 2020 dairy export forecasts were unchanged from the previous month on a milk-fat basis but raised on a skim-solids basis on strong international demand for nonfat dry milk/skim milk powder. 2020 dairy import forecasts were unchanged from the previous month on both a milk-fat and skim-solids basis. 2020 projected dairy export volumes translated to 15.8% of total U.S. milk solids production while import volumes were equivalent to 3.5% of total U.S. milk solids production. 2020 net dairy trade is projected to rebound from the 2019 levels but remain below the 2018 record highs. 2020 butter and cheese price forecasts were reduced from the previous month on relatively weak demand, however the dry whey price forecast was raised from the previous month. The 2020 nonfat dry milk price forecast remained unchanged from the previous month. The 2020 Class III milk price forecast of $16.95/cwt was reduced $0.40/cwt from the previous forecast, finishing at a six month low projected level, while the 2020 Class IV milk price forecast of $16.70/cwt was reduced $0.20/cwt, finishing at a three month low projected level. The 2020 All-Milk price forecast of $18.85/cwt was reduced $0.40/cwt from the previous forecast but remained 1.3% above 2019 price levels. The 2020 All-Milk price projection remained on pace to reach a six year high level.