USDA expects better dairy prices ahead as the nation’s dairy herd contracts. The dairy markets are not escaping impact from the tariffs and USDA reflected that in this month’s report. For 2018 and 2019, fat-basis export forecasts are reduced from the previous month on slowing shipments of whey products and a number of other dairy products, USDA said. USDA lowered export forecasts for 2018 and 2019 on a skim-solids basis citing weaker whey product sales to China.
In its August supply and demand report, USDA forecasts cheese, nonfat dry milk and whey prices higher for 2018 and butter prices lower. Class III prices were also higher. USDA projects nonfat dry milk and whey prices to increase next year, while cheese is expected to remain unchanged and butter prices were lowered.
USDA has lowered its estimate for 2018 milk production because of a slightly smaller dairy herd and slower rate of growth.
Next year’s production was increased from last month on expectations for a slightly larger cow herd.
USDA projects Cheese, NDM, and whey prices to be higher for the remainder 2018, but butter prices are lowered from the previous month.
USDA boosted 2018 Class III price forecasts on improved cheese and whey prices. They also increased Class IV price forecasts as they expect NDM price improvements to more than offset lower butter prices.
The all-milk price is raised to $16.30 to $16.50 per cwt for 2018 and $16.75 to $17.75 per cwt for 2019