The USDA’s monthly World Ag Supply and Demand Estimates (WASDE) report was released Oct. 12. The milk production forecast for 2023 was raised from last month on slightly more milk output per cow, while the forecast for 2024 was unchanged. Price outlooks were mixed.
- At 227.6 billion pounds, the 2023 production forecast was raised 100 million pounds from last month’s estimate. If realized, 2023 production would be up less than 0.5% from 2022.
Recent strength in butter and nonfat dry milk prices and expectations of continued firm demand supported an increase in the outlook for the Class IV milk price. Weaker cheese prices pressured Class III milk prices lower. The projected 2023 Class III price was cut 30 cents to $17.05 per hundredweight (cwt). The 2023 Class IV price forecast was raised 65 cents to $19.25 per cwt. The projected all-milk price for 2023 was raised 30 cents to $20.70 per cwt.
- In its forecast for 2024, the USDA estimated milk production at 230.4 billion pounds, unchanged from a month earlier. If realized, 2024 production would be up about 1.2% from 2023. There’s an additional milking day in leap year.
Compared to a month ago, 2024 price forecasts for butter and nonfat dry milk were raised as price strength is expected to carry into the new year. The cheese price was reduced and the whey price was unchanged. As a result, the projected Class III milk price was reduced 35 cents to $17.20 per cwt, the Class IV price was raised 80 cents to $18.80 per cwt, and the all-milk price was raised 25 cents to $20.55 per cwt.
Beef outlook
For 2023, the beef production forecast was raised on higher cow and bull slaughter in the second half of the year, which more than offsets lowered third-quarter steer and heifer slaughter. The predicted increase in total slaughter was partially offset by lower dressed weights. For 2024, beef production was raised primarily on higher feedlot marketings.
Cattle price forecasts for 2023 were lowered about $1 from last month, reflecting September and early October prices and weaker expected demand for cattle during the fourth quarter of the year. Cattle prices for 2024 were also lowered $1 from last month, as larger supplies of cattle in feedlots are expected to put downward pressure on fed cattle prices. The fed cattle price forecast for 2023 was estimated at $177.30 per cwt, with prices reaching $185 per cwt in the fourth quarter. The early forecast for 2024 was $185 per cwt.
Feed supply, price forecasts
The USDA’s Crop Production and WASDE reports provided potential insights into dairy feedstuff supplies and prices:
- Corn: This month’s 2023-24 U.S. corn outlook called for reduced production, lower feed and residual use and exports. Corn production was forecast at 15.1 billion bushels, down about 1% from the previous forecast, with a 0.8-bushel cut in average yield to 173 bushels per acre. Area harvested for grain, forecast at 87.1 million acres, was unchanged from the previous forecast but up 10% from the last year. With supply falling more than use, corn ending stocks for 2023-24 were lowered.
At $4.95 per bushel, the projected season-average corn price received by producers was raised a nickel from the September forecast but is down $1.59 (24%) from the 2022-23 average of $6.54 per bushel.
- Soybeans: The 2023-24 U.S. soybean outlook called for lower production partly offset by higher beginning stocks, leaving supplies down slightly. Production was forecast at 4.1 billion bushels, down 1% from the previous forecast and down 4% from 2022. Based on conditions as of Oct. 1, yields are expected to average 49.6 bushels per acre, down 0.5 bushel from the previous forecast but equal to 2022. Area harvested was forecast at 82.8 million acres, unchanged from the previous forecast but down 4% from 2022.
The 2023-24 U.S. season-average soybean price received by producers was forecast at $12.90 per bushel, unchanged from last month’s forecast. It compares with an average price of $14.20 per bushel in 2022-23. Soybean meal prices were forecast to average $380 per ton, also unchanged from last month’s forecast but $71 (16%) less than the 2022-23 average of $452 per ton.
- Dry hay: The October Crop Production report offered an updated outlook for alfalfa and other dry hay.
Production of alfalfa and alfalfa-mixture dry hay for 2023 was forecast at 52.7 million tons, up 8% from the August forecast and up 10% from 2022. Based on Oct. 1 conditions, yields are expected to average 3.37 tons per acre, up 0.24 ton from the August forecast and up 0.15 ton from last year. Harvested area was forecast at 15.7 million acres, unchanged from the USDA Acreage report but up 5% from 2022. Record-high yields were forecast for New Mexico and North Dakota.
Production of other hay was forecast at 70.1 million tons, up less than 1% from the August forecast and up 8% from 2022. Based on conditions as of Oct. 1, the U.S. yield was expected to average 1.93 tons per acre, up 0.01 ton from the August forecast and up 0.06 ton from last year. Harvested area was forecast at 36.3 million acres, unchanged from the Acreage report but up 5% from 2022. Record-high yields are expected in Alabama, Georgia, Nebraska, North Dakota and Wyoming.
- Cottonseed: As a predictor of cottonseed availability, all cotton production was forecast at 12.8 million 480-pound bales, down 2% from the previous forecast as lower yields in Texas offset gains elsewhere. The Crop Production report estimated the cottonseed harvest at about 3.9 million tons, the smallest total since 2013 and 2015.
