USDA adjusts 2021-22 milk production outlook, lowers price projections

USDA’s latest World Ag Supply and Demand Estimates (WASDE) report, released on July 12, reduced milk production forecast slightly for 2021, but increased production expected in 2022. Price projections have been reduced for both years.

For 2021, the USDA projects milk production of 228.2 billion pounds, down 300 million pounds from last month’s estimate due to slower expected growth in milk per cow, offsetting the increase in the number of cows. If achieved, 2021 production would be up about 2.2% from 2020.

For 2021, price forecasts for cheese, butter, skimmed milk powder (NDM) and whey have been revised down from last month due to relatively high stocks and lower demand. As a result, the projected Class III and IV prices for 2021 have been lowered to $ 16.80 and $ 15.40 per cwt (cwt), respectively. The all milk price forecast for 2021 has been lowered 55 cents from last month to $ 18.30 per cwt, almost the same as the 2020 average of $ 18.24 per cwt.

In the USDA forecast through 2022, milk production was forecast at 231.6 billion pounds, up 500 million pounds from last month as the number of cows continues to grow. If achieved, 2022 production would be up about 1.5% from the 2021 forecast.

For 2022, the price forecast for cheese and butter has been lowered due to larger expected stocks and higher production, but the price forecast for NDM and whey is unchanged. With the decline in cheese and butter prices, the average annual price forecasts for Class III ($ 16.75 per cwt) and Class IV ($ 15.75 per cwt) have been reduced from last month, and the price all screened milk has been reduced from 25 cents to $ 18.50 per cwt.

The USDA Cattle Report, which will be released on July 23, will provide a mid-year estimate of dairy cow inventory and producer intentions regarding heifer retention for dairy cow replacement.

Beef Outlook

The 2021 beef production forecast remained unchanged as the higher slaughter was offset by lower expected carcass weights; The projected average annual price of feeder cattle increased $ 2 from last month to about $ 119 per cwt, up $ 11 from the 2020 average.

Corn and soybean outlook

Based on WASDE’s supply and demand estimates, the power supply and cost projections included:

• But: Compared to a month ago, the US corn outlook for 2021-22 estimated higher supplies, higher feed and residual use, increased exports and higher ending stocks. At $ 5.60 per bushel, the projected seasonal average price of corn received by producers would be about $ 1.20 (27%) higher than the 2020-2021 average of $ 4.40 per bushel and 2 $ 04 more than the 2019-20 average of $ 3.56 per bushel.

• Soy : The U.S. soybean supply and use forecast for 2021-2022 was unchanged from last month. The expected seasonal average U.S. soybean price received by producers has been lowered 15 cents from last month to $ 13.70 per bushel, up $ 2.65 (24%) from the average 2020-2021 from $ 11.05 per bushel. The projected soybean meal price was forecast at $ 395 per tonne, down $ 5 from the previous month. If achieved, it would be unchanged from the 2020-21 average, but up over $ 95 per tonne from 2019-20.

Dave natzke

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