The USDA’s latest World Ag Supply and Demand Estimates (WASDE) report, released Aug. 12, reduced 2021 and 2022 milk production forecasts slightly on expectations of lower cow numbers going forward. Price projections were also reduced for both years due to larger supplies and weakening demand.
For 2021, the USDA forecasts milk production at 228.1 billion pounds, down 100 million pounds from last month’s estimate. If realized, 2021 production would be up about 2.2% from 2020.
For 2021, cheese, butter, nonfat dry milk (NDM) and whey price forecasts were all lowered from last month. As a result, projected 2021 Class III and Class IV prices were lowered to $16.55 and $15.15 per hundredweight (cwt), respectively. The 2021 all-milk price forecast was cut 35 cents from last month to $17.95 per cwt, down 29 cents from the 2020 average of $18.24 per cwt.
In the USDA’s look ahead to 2022, milk production was forecast at 231.2 billion pounds, down 400 million pounds from last month. If realized, 2022 production would be up about 1.4% from the 2021 forecast.
For 2022, price forecasts for cheese and butter were again lowered, but price forecasts for NDM and whey were little changed. With lower cheese and butter prices, the annual average Class III ($16.15 per cwt) and Class IV ($15.30 per cwt) price forecasts were reduced from last month, and the projected all-milk price was cut 65 cents to $17.85 per cwt.
Beef price outlook improves
The 2021 beef production forecast was reduced from last month, largely reflecting lighter expected carcass weights due to a higher expected proportion of non-fed cattle being slaughtered through the end of the year. The 2022 beef production forecast was lowered on tighter expected supplies of both fed and non-fed cattle. The projected annual average fed cattle price for 2021 was raised $2 from last month to about $121 per cwt, up $12.70 from the 2020 average. The price outlook for 2022 was raised to $126 per cwt.
Higher corn prices forecast
In addition to WASDE supply and demand estimates, feed supply and cost projections, the USDA also released an August Crop Production report providing a forecast of 2021 yield and production estimates. Here’s a summary:
– Corn: Compared to a month ago, the 2021-22 U.S. corn outlook calls for lower supplies; reduced feed and residual use; increased food, seed and industrial use; lower exports; and smaller ending stocks. At $5.75 per bushel, the projected season-average corn price received by producers was raised 15 cents from last month. That would be about $1.35 (31%) more than the 2020-21 average of $4.40 per bushel and $2.19 (62%) more than the 2019-20 average of $3.56 per bushel.
The Crop Production report forecasts the 2021 harvest at 14.8 billion bushels, up 4% from 2020. Based on conditions as of Aug. 1, yields are expected to average 174.6 bushels per harvested acre, up 2.6 bushels from last year. Area harvested for grain is forecast at 84.5 million acres, unchanged from the June forecast but up 2% from the previous year.
– Soybeans: The 2021-22 U.S. soybean supply and use outlook forecasts higher beginning stocks and lower production, crush and exports. At $13.70 per bushel, the projected U.S. season-average soybean price received by producers was unchanged from last month but would be up $2.80 (26%) from the 2020-21 average of $10.90 per bushel. The projected soybean meal price was forecast at $385 per ton, down $10 from the previous month. If realized, it would be down $10 from the 2020-21 average but up more than $85 per ton from 2019-20.
Soybean production was forecast at 4.34 billion bushels, up 5% from 2020. Based on conditions as of Aug. 1, yields are expected to average 50 bushels per harvested acre, down 0.2 bushel from 2020. Area harvested was forecast at 86.7 million acres, unchanged from the previous forecast but up 5% from 2020.
– Dry hay: Production of alfalfa and alfalfa mixture dry hay for 2021 is forecast at 47.8 million tons, down 10% from 2020. Based on Aug. 1 conditions, yields are expected to average 2.97 tons per acre, down 0.3 ton from last year. Harvested area is forecast at 16.1 million acres, unchanged from June’s Acreage report but down 1% from 2020. Record-high yields are expected in California and Arizona.
Production of other hay is forecast at 70.9 million tons, down 4% from 2020. Based on Aug. 1 conditions, the yield is expected to average 2 tons per acre, down 0.05 ton from last year. Harvested area is forecast at 35.4 million acres, unchanged from the Acreage report but down 2% from 2020. Record-high yields are expected in Alabama and West Virginia.
– Cottonseed: The Crop Production report estimated the 2021 cottonseed crop at 5.27 million tons, up about 762,000 tons (17%) from 2020.