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Dave Natzke
Editor / Progressive Dairy

USDA cuts 2022-23 milk production forecasts, raises 2023 price projections

The USDA’s monthly World Ag Supply and Demand Estimates (WASDE) report, released July 12, 2022, again revised the 2022-23 U.S. milk production estimates lower due to slower growth in milk per cow. Despite the outlook for production lowered in 2022, projected farm-level milk prices were steady to slightly lower for 2022 but raised for 2023 when compared to last month’s price projections.

  • Compared to last month, the USDA cut the 2022 milk production forecast by 400 million pounds to 226 billion pounds. If realized, 2022 production would be down 300 million pounds from 2021.

The 2022 butter price forecast was raised from last month on firm demand, but the cheese price was forecast lower on continued large stocks. The price forecasts for nonfat dry milk (NDM) and whey prices are unchanged.

Compared to a month ago, the projected 2022 annual average Class III price was reduced 10 cents to $22.80 per hundredweight (cwt). The projected Class IV price was raised 5 cents to $24.70 per cwt. The 2022 all-milk price forecast was cut 5 cents from last month to $26.15 per cwt.

  • For 2023, the USDA projected milk production at 228.3 billion pounds, 1 billion pounds less than last month’s forecast. If realized, 2023 production would be up about 1% from the 2022 estimate.

The 2023 price forecasts for cheese, butter and NDM were raised on expected lower production, but the price forecast for whey was lowered on expected weaker international prices.

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Annual average price projects for 2023 were: Class III – $20.85 per cwt, Class IV – $22.30 per cwt and all-milk – $24.15 per cwt.

The USDA’s Cattle report, to be released July 22, will provide a midyear estimate of the dairy cow inventory and producer intentions regarding retention of heifers for dairy cow replacement.

  • Beef production, price outlook: The 2022-23 beef production estimate was lowered slightly on lower expected carcass weights in early 2023. The 2022 cattle price forecast was raised slightly from last month. The USDA estimated 2022 annual average prices for fed cattle at about $141 per cwt, about $19 more than the 2021 average of $122.40 per cwt. The estimated 2023 annual average price for fed cattle was $153 per cwt, unchanged from last month’s forecast. The USDA’s Cattle report will provide an indication of producer intentions for heifer retention and the 2022 calf crop.
  • Crop price forecasts slightly lower: The WASDE report provided some updated feed supply and demand estimates and price projections:
  • Corn: This month’s 2022-23 U.S. corn outlook called for larger supplies and higher ending stocks. At $6.65 per bushel, the projected season-average corn price received by producers was down 10 cents from last month’s forecast but still up 70 cents (12%) from the 2021-22 average of $5.95 per bushel and about $2.12 (47%) more than 2020-21 average of $4.53 per bushel.
  • Soybeans: The 2022-23 U.S. soybean supply and use outlook projected lower production compared to a month ago. With lower supplies only partly offset by reduced use, ending stocks for 2022-23 are projected at 230 million bushels, down 50 million from last month. The U.S. season-average soybean price for 2022-23 is forecast at $14.40 per bushel, down 30 cents from last month, $1.05 (8%) more than the $13.35 per bushel average for 2021-22 and $3.60 (33%) more than the $10.80 per bushel average in 2020-21. The 2022-23 soybean meal price was projected at $390 per ton, down $10 from last month’s forecast and down $35 (8%) from the $425 per ton average in 2021-22 and $2.25 less than the average for 2020-21.
  • Cottonseed: Affecting cottonseed, the U.S. 2022-23 cotton outlook called for lower production and ending stocks compared with last month. While the USDA’s June 30 Acreage report showed nearly 250,000 additional acres planted than in the previous National Ag Statistics Service (NASS) survey, harvested area is forecast nearly 600,000 acres lower this month, primarily due to acreage abandonment in Texas.

SMI adds dairy transportation director

Southeast Milk Inc. (SMI) announced the hiring of Christian Comstock as director of transportation. Comstock, who previously managed transportation operations for California Dairies Inc. (CDI), brings over 25 years of dairy transportation experience to his new role.

SMI is a full-service dairy cooperative operating across six states. It markets nearly 1.8 billion pounds of milk annually on behalf of its nearly 130 members. Comstock will oversee the cooperative’s food-grade transportation business, which currently moves over 100 loads of milk and dairy products each day.

SMI previously announced that Shana Wooten, former chief operating officer with the co-op, had returned as director of milk marketing.

AMPI announces leadership transition

The unique leadership structure of Associated Milk Producers Inc. (AMPI) will change effective January 2023, according to AMPI board Chair Steve Schlangen, a dairy farmer from Albany, Minnesota.

At that time, Donn DeVelder, who has shared co-president and CEO roles with Sheryl Meshke since January 2015, will complete his tenure in that position, leaving Meshke as sole CEO of the Midwest dairy co-op.

Meshke joined AMPI in 1991, and during her tenure, she led communications, public affairs, human resources and strategic planning. Before becoming co-CEO, she was the executive senior vice president leading strategic initiatives.

AMPI, headquartered in New Ulm, Minnesota, is owned by dairy farm families from Wisconsin, Minnesota, Iowa, Nebraska, South Dakota and North Dakota. AMPI members annually market about 4.9 billion pounds of milk generating $1.6 billion in sales.

Hiland Dairy acquires Borden Dairy assets in Texas

Hiland Dairy Foods announced it is has acquired or leased the dairy processing plants and branch operations of Borden Dairy in Texas.

Farmer-owned Hiland Dairy Foods Company, based in Springfield, Missouri, operates 16 processing plants and 52 distribution centers in nine states, producing and marketing dairy foods and other beverages in Arkansas, Iowa, Kansas, Missouri, Mississippi, Nebraska, Oklahoma, Tennessee and Texas.

Hiland Dairy's expansion plan into Texas began 10 years ago when the company started distributing dairy products to select markets. In 2017, Hiland purchased three plants in Tyler, Texas.

Borden Dairy Texas sites are located in Forth Worth, Texarkana and San Antonio, Texas.

House Ag Committee adds online farm bill comment form

The House Ag Committee has created an online comment form for dairy producers and others to provide comments as development of the 2023 Farm Bill continues.

House Ag Committee listening sessions are currently underway. (Read: House ag committee farm bill listening sessions hitting major dairy states.)

To provide additional opportunities for feedback, U.S. Reps. David Scott (D-Georgia), chair, and Glenn Thompson (R-Pennsylvania), ranking member, announced an online farm bill feedback form.

In addition to the feedback gathered online, the House Agriculture Committee will continue to conduct hearings in Washington, D.C. and hold listening sessions across the country to gather input in preparation for the 2023 Farm Bill. Upcoming sessions are scheduled for July 22 in Carnation, Washington, and July 25 in Northfield, Minnesota.