USDA raises wholesale price forecasts for all major dairy products.
Due to declines in milk cows in recent months, higher projected feed prices, a low inventory of replacement heifers, and higher expected cull-cow prices, milk cows are projected to average 9.360 million head in 2022, 25,000 lower than USDA’s January forecast, according to the agency latest “Livestock, Dairy and Poultry Outlook.” Milk per cow is projected to average 24,265 pounds per head in 2022, unchanged from the previous forecast. As a result, the milk production forecast for 2022 has been adjusted to 227.2 billion, 0.5 billion pounds lower than last month’s forecast but 0.9 billion pounds above 2021.
With U.S. dairy prices expected to be less competitive in international markets, USDA adjusted its 2022 export projections downward. Lower exports are expected for whey products, dry skim milk products, butter, and cheese. The forecast for 2022 dairy exports on a milk-fat basis has been adjusted to 11.0 billion pounds, 0.2 billion lower than last month. On a skim-solids basis, the 2022 dairy export forecast has been adjusted to 51.2 billion pounds, 0.6 billion lower than last month’s forecast. Dairy import projections for 2022 have been raised to 6.9 billion pounds on a milk-fat basis (up 0.1 billion) and 5.7 billion pounds on a skim-solids basis (up 0.1 billion). Higher imports are expected for butter, milk protein products, and several other miscellaneous dairy products.
The forecast for 2022 ending stocks on a milk-fat basis is adjusted to 14.1 billion pounds, 0.4 billion lower than the previous forecast. USDA said the adjustment is mostly due to lower-than-expected beginning stocks and lower projected milk production. On a skim-solids basis, the forecast for ending stocks is unchanged at 10.6 billion pounds, as the higher-than-expected beginning stocks are largely offset by lower projected milk production during the year. The projection for 2022 domestic use on a milk-fat basis is 222.2 billion pounds (down 0.2 billion). On a skim-solids basis, the forecast for domestic use is 180.8 billion pounds (up 0.5 billion).
Due to relatively high domestic and international dairy product prices in recent weeks, lower projected milk production, and relatively low beginning stock levels, USDA raised wholesale price forecasts for all major dairy products. With higher dairy product prices expected across the board, USDA raised Class III and IV milk price forecasts for 2022 to $20.30/cwt. (up 65 cents) and $22.30/cwt. (up $1.40), respectively. The all-milk price forecast for 2022 is $23.55/cwt., 95 cents higher than the January forecast.
