According to the February USDA World Agricultural Supply and Demand Estimate (WASDE) report, the 2022 milk production projection was reduced by 500 million pounds, or 0.2%, from the previous month on lower projected dairy cow numbers. 2022 projected milk production volumes remained 0.4% above previous year levels, however. The 2022 projected YOY increase in U.S. milk production volumes of 0.4% would be the smallest experienced throughout the past three years and the second smallest experienced throughout the last 13 years on a percentage basis.

2022 dairy export forecasts were reduced from the previous month on both a milk-fat and skim-solids basis on lower expected shipments of butter, cheese, skim milk powder and whey products. 2022 dairy import forecasts were raised from the previous month on both a milk-fat and skim-solids basis on higher expected imports of butter, milk proteins and several other dairy-containing products.

2022 projected dairy export volumes equated to 18.0% of total U.S. milk solids production, down slightly from the record high level experienced throughout 2021, while import volumes were equivalent to 3.7% of total U.S. milk solids production, up slightly from the previous year. 2022 net dairy trade is projected to finish slightly below the record high levels experienced throughout the previous year.

2022 butter, cheese, dry whey and nonfat dry milk price forecasts were all raised from the previous month on current prices, lower expected milk production and tightening stocks. The 2022 Class III milk price forecast of $20.30/cwt was raised $0.65/cwt from the previous forecast, finishing 18.9% above previous year price levels. The 2022 Class IV milk price forecast of $22.30/cwt was raised $1.40/cwt from the previous forecast, finishing 38.6% above previous year price levels. The 2022 All-Milk price forecast of $23.55/cwt was raised $0.95/cwt from the previous month, finishing 26.0% above the previous year price levels and reaching an eight year high level, overall.