The 2020 milk production forecast at 222 billion pounds would be up about 1.7% from 2019. Projected 2020 prices for cheese and butter were reduced compared to a month ago, the dry whey price was forecast slightly higher, and the nonfat dry milk price was unchanged.
As a result, the USDA reduced the 2020 Class III milk price forecast to $16.95 per hundredweight (cwt), down 40 cents from last month, and the Class IV price to $16.70 per cwt, down 20 cents. The 2020 all-milk price is now projected at $18.85 per cwt, 40 cents less than last month’s forecast.
Dairy supply and use estimates for 2019 showed minor adjustments. Total 2019 milk marketings at 217.3 billion pounds were up just 0.3% from 2018. The 2019 all-milk price was $18.60 per cwt, the Class III price was $16.96 per cwt, and the Class IV price was $16.30 per cwt.
The beef production forecast was raised from the previous month on higher cattle slaughter and heavier cattle weights in the first half of the year. However, the forecasts for second-half beef production was reduced on lower anticipated steer and heifer slaughter, based on a semiannual USDA cattle inventory report showing a smaller number of cattle outside feedlots to start the year.
The 2020 average fed cattle price was projected at $117 per cwt, down 50 cents from last month’s forecast but up about 22 cents from the 2019 average of $116.78 per cwt. Highest prices are expected in the first quarter of the year.
Impacting the cost side of the dairy income ledger:
Corn: This month’s 2019-20 U.S. corn outlook is little changed relative to last month. Projected exports were lowered, reflecting the slow pace of shipments through January, but that was offset by an equal increase in use of corn for ethanol production. With no other use changes, U.S. corn ending stocks are unchanged from last month. The projected 2019-20 season-average corn price received by producers remains at $3.85 per bushel, unchanged from last month’s forecast and up 24 cents from the 2018-19 average price.
- Soybeans: This month’s 2019-20 U.S. soybean outlook called for increased exports and lower ending stocks. Nonetheless, the U.S. season-average soybean price received by producers for 2019-20 was forecast at $8.75 per bushel, down 25 cents from the previous month’s forecast. The soybean meal price forecast was unchanged at $305 per ton.
- Progressive Dairy
- Email Dave Natzke