In its March World Ag Supply and Demand Estimates (WASDE) report, the USDA increased its U.S. milk production forecast for 2023. Milk price predictions, however, went in the opposite direction.
For 2022, milk supply and use estimates were adjusted to reflect revisions to estimates of milk production and stocks. This resulted in last month’s 2022 milk production report to end at 226.5 billion lb., dropping 100 million lb. from its previous 226.6 billion lb. estimate.
For 2023, milk production was forecasted higher due to a larger cow inventory. Currently, this year’s milk production forecast stands at 228.5 billion lb., up 200 million from last month and 0.08% from 2022’s final production.
According to the USDA, cheese prices were lowered as supplies are expected to be relatively large and domestic demand is projected to be relatively soft. Butter prices were raised on recent data while nonfat dry milk prices remained unchanged. Whey prices were raised on recent price observations and stronger expected demand.
With the changes in component prices, Class III prices were projected 35 cents lower to $17.55 per cwt., while Class IV price projections saw some growth, jumping 5 cents higher to $18.30.
Currently, the all-milk price stands at $20.45 per cwt, 25 cents lower than February’s 2023 all-milk price prediction.