The USDA’s monthly World Ag Supply and Demand Estimates (WASDE) report was released Jan. 12. Also released were monthly and annual Crop Production reports, providing updates on most major dairy feedstuffs.
Milk production, prices
The milk production estimate for 2023 was lowered from last month, and the forecast for 2024 was also lowered due to lower milk cow numbers and slow growth in milk per cow.
- At 226.6 billion pounds, the 2023 production estimate was lowered 300 million pounds from last month and would be virtually unchanged from 2022’s total of 226.5 billion pounds.
Based on year-end prices, cheese and butter price averages were lowered while nonfat dry milk (NDM) and dry whey prices were unchanged. The 2023 Class III price was lowered 3 cents to $17.02 per hundredweight (cwt). The 2023 Class IV price was raised 2 cents to $19.12 per cwt. The all-milk price for 2023 was unchanged at $20.60 per cwt.
- In its forecast for 2024, the USDA estimated milk production at 228.3 billion pounds, down 700 million pounds last month’s estimate. If realized, 2024 production would be up about 0.8% from 2023. There’s an additional milking day in leap year.
Compared to a month ago, the 2024 cheese price forecast was lowered, while butter, NDM and whey prices were raised slightly. As a result, the projected Class III milk price was reduced 75 cents to $16.10 per cwt, the Class IV price was raised 45 cents to $19.35 per cwt, and the all-milk price was lowered 25 cents to $20 per cwt. With the spread between Class III-Class IV milk prices, market incentives to “depool” Class IV milk from Federal Milk Marketing Orders (FMMOs) will remain throughout the year.
The USDA’s Cattle report, which will be released Jan. 31, will provide an indication of producer intentions for retaining dairy heifers for addition to the breeding herd.
Beef outlook
For 2024, the beef production forecast was raised due to higher cattle slaughter and heavier dressed weights. The USDA’s Cattle report, which will be released Jan. 31, will provide an indication of the number of cattle available for placement during 2024 as well as producer intentions for retaining heifers for addition to the breeding herd.
Cattle price forecasts are unchanged for 2024, with highest prices projected for the fourth quarter. The fed cattle price forecast for 2024 was estimated at $178 per cwt, with average prices reaching $183 per cwt in the fourth quarter. The 2023 average was $175.50 per cwt.
Feed supply, price forecasts
The USDA’s January 2024 and annual 2023 Crop Production reports and WASDE report provide potential insights into dairy feedstuff supplies and prices:
- Corn: This month’s 2023-24 U.S. corn outlook called for greater production, increased use and higher ending stocks.
U.S. corn grain production was estimated at a record-high 15.3 billion bushels in 2023, up 12% from 2022. Area harvested for grain was estimated at 86.5 million acres, up 10%, with the average yield estimated at a record-high 177.3 bushels per acre. Corn stored in all positions on Dec. 1, 2023, totaled 12.2 billion bushels, up 13% from a year earlier.
At $4.80 per bushel, the projected 2023-24 season-average corn price received by producers was down a nickel from the December forecast and is down $1.74 (27%) from the 2022-23 average of $6.54 per bushel.
Also, corn silage production was estimated at 130 million tons for 2023, up 1% from the 2022 estimate. The U.S. silage yield was estimated at 20.1 tons per acre, up 1.4 tons from 2022.
- Soybeans: This month’s 2023-24 soybean outlook called for higher ending stocks. Production in 2023 totaled 4.16 billion bushels, down 2% from 2022. Soybean growers harvested 82.4 million acres, down 4% from 2022. The average yield was estimated at 50.6 bushels per acre, 1 bushel above 2022.
Soybeans stored in all positions on Dec. 1, 2023, totaled 3 billion bushels, down 1% from a year earlier.
The 2023-24 U.S. season-average soybean price received by producers was forecast at $12.75 per bushel, down 15 cents 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, down $10 from last month’s forecast and $72 less than the 2022-23 average of $452 per ton.
- Cottonseed: The 2023-24 cottonseed harvest was cut to 3.79 million tons, down about 14% from 2022 and the smallest harvest in more than two decades.
- Hay and forages: U.S. production of all dry hay for 2023 was estimated at 119 million tons, up 6% from 2022. Production of alfalfa and alfalfa mixture hay was estimated at 49.9 million tons, up 2%. Production of all other hay totaled 68.9 million tons, up 9%.
In 2023, 17 states were included in the forage estimation program, which measures annual production of forage crops. Haylage and greenchop production was converted to 13% moisture and combined with dry hay production to derive the total forage production. The 17-state total for all forage production was 73.6 million tons. Of this total, 37.9 million tons were produced from alfalfa and alfalfa mixtures. The total 2023 all haylage and greenchop production was 25.5 million tons, of which 15.8 million tons were from alfalfa and alfalfa mixtures.
For more on hay prices and market conditions, read: Forage Market Insights: Inventories and weather are the drivers
Watch for state and regional details in the upcoming Progressive Forage forage statistics insert.
Winter hay inventories estimated
With the 2023 hay crop in storage or market transit, hay inventories stored on U.S. farms as of Dec. 1, 2023, was estimated at 76.7 million tons, up almost 5 million tons (7%) from the same date a year ago. Among the 24 major dairy states, on-farm hay inventories were estimated at 39.4 million tons, down 600,000 tons (1.5%) from a year earlier.
Largest increases in hay inventories were in Oklahoma, South Dakota, North Dakota and Nebraska. Largest declines were in Minnesota, Wisconsin, New York and Kansas.
