The USDA’s monthly World Ag Supply and Demand Estimates (WASDE) report, released July 12, 2022, again revised the 2022-23 U.S. milk production estimates lower due to slower growth in milk per cow. Despite the outlook for production lowered in 2022, projected farm-level milk prices were steady to slightly lower for 2022 but raised for 2023 when compared to last month’s price projections.
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(Photo by Scott Bauer/Agricultural Research Service, USDA)

Compared to last month, the USDA cut the 2022 milk production forecast by 400 million pounds to 226 billion pounds. If realized, 2022 production would be down 300 million pounds from 2021.
The 2022 butter price forecast was raised from last month on firm demand, but the cheese price was forecast lower on continued large stocks. The price forecasts for nonfat dry milk (NDM) and whey prices are unchanged.

Compared to a month ago, the projected 2022 annual average Class III price was reduced 10 cents to $22.80 per hundredweight (cwt). The projected Class IV price was raised 5 cents to $24.70 per cwt. The 2022 all-milk price forecast was cut 5 cents from last month to $26.15 per cwt.

For 2023, the USDA projected milk production at 228.3 billion pounds, 1 billion pounds less than last month’s forecast. If realized, 2023 production would be up about 1% from the 2022 estimate.
The 2023 price forecasts for cheese, butter and NDM were raised on expected lower production, but the price forecast for whey was lowered on expected weaker international prices.

Annual average price projects for 2023 were: Class III – $20.85 per cwt, Class IV – $22.30 per cwt and all-milk – $24.15 per cwt.

The USDA’s Cattle report, to be released July 22, will provide a midyear estimate of the dairy cow inventory and producer intentions regarding retention of heifers for dairy cow replacement.

Beef production, price outlook: The 2022-23 beef production estimate was lowered slightly on lower expected carcass weights in early 2023. The 2022 cattle price forecast was raised slightly from last month. The USDA estimated 2022 annual average prices for fed cattle at about $141 per cwt, about $19 more than the 2021 average of $122.40 per cwt. The estimated 2023 annual average price for fed cattle was $153 per cwt, unchanged from last month’s forecast. The USDA’s Cattle report will provide an indication of producer intentions for heifer retention and the 2022 calf crop.

Crop price forecasts slightly lower: The WASDE report provided some updated feed supply and demand estimates and price projections:

Corn: This month’s 2022-23 U.S. corn outlook called for larger supplies and higher ending stocks. At $6.65 per bushel, the projected season-average corn price received by producers was down 10 cents from last month’s forecast but still up 70 cents (12%) from the 2021-22 average of $5.95 per bushel and about $2.12 (47%) more than 2020-21 average of $4.53 per bushel.

Soybeans: The 2022-23 U.S. soybean supply and use outlook projected lower production compared to a month ago. With lower supplies only partly offset by reduced use, ending stocks for 2022-23 are projected at 230 million bushels, down 50 million from last month. The U.S. season-average soybean price for 2022-23 is forecast at $14.40 per bushel, down 30 cents from last month, $1.05 (8%) more than the $13.35 per bushel average for 2021-22 and $3.60 (33%) more than the $10.80 per bushel average in 2020-21. The 2022-23 soybean meal price was projected at $390 per ton, down $10 from last month’s forecast and down $35 (8%) from the $425 per ton average in 2021-22 and $2.25 less than the average for 2020-21.

Cottonseed: Affecting cottonseed, the U.S. 2022-23 cotton outlook called for lower production and ending stocks compared with last month. While the USDA’s June 30 Acreage report showed nearly 250,000 additional acres planted than in the previous National Ag Statistics Service (NASS) survey, harvested area is forecast nearly 600,000 acres lower this month, primarily due to acreage abandonment in Texas.

UK stocks slipped on Monday as investors refrained from making risky bets ahead of key central bank decisions this week, while gains in Unilever limited losses on the FTSE 100 after the consumer goods giant announced a new chief executive officer.

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