The USDA’s monthly World Ag Supply and Demand Estimates (WASDE) report, released Sept. 12, 2022, revised 2022-23 U.S. milk production estimates lower from last month, yielding slightly higher milk price projections.
Affecting production and milk marketings, estimated milk cow numbers were reduced, with slower growth in 2022 expected to carry into 2023. Output per cow was forecast to increase at a slightly more rapid pace in 2022, but the forecast for 2023 was unchanged. By year:
- Compared to last month, the USDA cut the 2022 milk production forecast by 300 million pounds, to 226.5 billion pounds. If realized, 2022 production would be up just 200 million pounds from 2021 and up just 1.4% from 2020.
For 2022, forecasts for butter and nonfat dry milk (NDM) prices were raised slightly on current price strength, but cheese and whey prices are unchanged. Compared to a month ago, the projected 2022 annual average Class III price was raised a nickel to $21.65 per hundredweight (cwt). The projected Class IV price was raised 50 cents to $24.45 per cwt. The 2022 all-milk price forecast was raised 25 cents from last month to $25.45 per cwt.
- For 2023, the USDA projected milk production at 228.8 billion pounds, 400 million pounds less than last month’s forecast. If realized, 2023 production would be up about 1% from the 2022 estimate.
For 2023, forecasts for butter and NDM prices were raised on tighter supplies, cheese price projections were lowered slightly, and the price outlook for whey was unchanged. The projected Class III price was unchanged at $19.70 per cwt, while the Class IV price forecast was raised 50 cents to $20.85 per cwt. The projected 2023 all-milk price was raised 20 cents to $22.70 per cwt.
Beef production, price outlook
The 2022 beef production estimate was raised for the second half of the year, with higher expected slaughter for the period offset slightly by lower expected third-quarter carcass weights. For 2023, the beef production forecast was raised, reflecting higher expected placements in late 2022, which will be marketed in the first half of 2023.
Potentially affecting cull cow prices, fed cattle price forecasts for 2022 were raised on current strength in demand, but forecasts for 2023 were unchanged.
The USDA estimated 2022 annual average prices for fed cattle at about $142.80 per cwt, more than $20 higher than the 2021 average of $122.40 per cwt. The highest prices for 2022 are forecast in the fourth quarter of the year. The estimated 2023 annual average price for fed cattle was $154 per cwt, unchanged from last month’s forecast.
Feed price, production forecasts
The WASDE and Crop Production reports provided some updated feed supply and demand estimates and price projections:
- Corn: This month’s 2022-23 U.S. corn outlook called for lower supplies, smaller feed and residual use, reduced exports and corn used for ethanol and tighter ending stocks. Corn production for grain was forecast at 13.9 billion bushels, down 3% from the previous forecast and down 8% from 2021. Based on conditions as of Sept. 1, yields were expected to average 172.5 bushels per harvested acre, down 2.9 bushels from the previous forecast and down 4.5 bushels from last year. Area harvested for grain is forecast at 80.8 million acres, down 1% from the previous forecast and down 5% from the last year.
At $6.75 per bushel, the projected season-average corn price received by producers was raised 10 cents from last month’s forecast and is up 80 cents (13%) from the 2021-22 average of $5.95 per bushel and about $2.22 (49%) more than 2020-21 average of $4.53 per bushel.
- Soybeans: The 2022-23 U.S. soybean supply and use outlook projected higher beginning stocks and lower production, crush, exports and ending stocks. Soybean production for 2022-23 was forecast at 4.38 billion bushels, down 3% from the previous forecast and down 1% from 2021. Based on conditions as of Sept. 1, yields were expected to average 50.5 bushels per acre, down 1.4 bushels from the previous forecast and down 0.9 bushel from 2021. Area harvested was forecast at 86.6 million acres, down 1% from the previous forecast but up less than 1% from 2021.
The U.S. season-average soybean price for 2022-23 was forecast at $14.35 per bushel, unchanged from last month but $1.05 (8%) more than the average for 2021-22 and $3.55 (33%) more than the $10.80 per bushel average in 2020-21.
The 2022-23 soybean meal price was projected at $390 per ton, also unchanged from last month’s forecast and down $50 (11%) from the $440 per ton average in 2021-22 and $2.30 (0.6%) less than the average for 2020-21.
- Hay: The USDA’s Crop Production report did not include harvest estimate updates.
- Cottonseed: Affecting cottonseed, the U.S. 2022-23 cotton outlook called for higher beginning stocks, production, exports and ending stocks compared to a month ago. As a result, the cottonseed harvest was estimated at 4.2 million tons, up 600,000 tons from last month’s forecast but down 1.1 million tons (21%) from 2021. It would be the lowest cottonseed output since 2015.