USDA’s Sept. 11 World Ag Supply & Demand Estimates report raised 2014 milk production projections on the strength of more output per cow, but left the estimate for 2015 unchanged from last month.
• 2014 milk production and marketings were projected 300 million lbs. higher compared to a month ago, at 206.3 billion lbs. and 205.3 billion lbs., respectively. If realized, 2014 production and marketings would be up about 2.5% from 2013.
• 2015 production and marketings were projected at 212.5 billion lbs. and 211.5 billion lbs., respectively. If realized, 2015 production and marketings would be up about 3.0% from 2014.
U.S. dairy product export forecasts for 2014 and 2015 were lowered, as higher U.S. prices for butter and cheese make those products less competitive in world markets. Estimated skim-solids and fat-basis imports were raised for both 2014 and 2015, as supplies from competing exporters are expected to be large, while U.S. prices remain relatively high.
Compared to a month ago, butter and cheese price forecasts (see table) were raised for 2014, with strength expected to continue into the first part of 2015. Nonfat dry milk (NFDM) prices were forecast lower in 2014 and 2015; the projected whey price was unchanged for 2014, but lowered fractionally for 2015.
Projected Class III prices for 2014 and 2015 were raised compared to a month ago. The Class IV price was forecast higher in 2014, but reduced in 2015.
The projected all-milk price was raised to $23.80-$24.00/cwt. for 2014, but lowered for 2015 to $19.40-$20.40/cwt.
Beef prices steady
Affecting cull cow prices, September beef steer price projections for 2014 and 2015 were mostly steady with August’s estimates. The 2014 annual average is projected at $151-$154/cwt., up $1 on each end of the range. Highest prices expected during the third and fourth quarters of the year. For 2015, the annual average is projected at $149-$162/cwt.
Estimated 2014 beef production was reduced slightly, as supplies of cattle coming out of feedlots have been below expectations. However, this is partly offset by higher expected dressed weights, as lower feed costs and reduced heifer and cow slaughter boost weights.
For 2015, estimated beef production was also cut, as lower placements of cattle in the second half of 2014 are expected to reduce supplies of fed cattle in 2015, despite heavier carcass weights.
Forecasts for 2014 and 2015 beef imports were higher due to tight cull cow supplies and strong
consumer demand for processing grade beef. Beef exports for 2014 and 2015 were unchanged.
Feed situation
In addition to USDA’s WASDE report, the Sept. 11 Crop Production report also figures into the feed price outlook. With larger crops leading to larger ending stocks, prices projections were lowered from last month.
The projected season-average corn farm price was lowered 40¢/bushel at the midpoint, to $3.20-$3.80/bushel.
Soybean and product prices were all projected lower for 2014/15. The U.S. season-average soybean price was projected at $9.00-$11.00/bushel, down 35¢ on both ends of the range. Soybean meal prices were projected at $330-$370/ton, down $10 on both ends of the range.
| USDA dairy price forecasts | |||
| Estimated | Forecast | Forecast | |
| Product | 2013 | 2014 | 2015 |
| Class III ($/cwt) | 17.99 | 22.15-22.35 | 17.20-18.20 |
| Class IV ($/cwt) | 19.05 | 22.30-22.60 | 18.45-19.55 |
| All milk ($/cwt) | 20.05 | 23.80-24.00 | 19.40-20.40 |
| Cheese ($/lb.) | 1.7683 | 2.135-2.155 | 1.690-1.790 |
| Butter ($/lb.) | 1.5451 | 2.170-2.210 | 1.675-1.805 |
| NFDM ($/lb.) | 1.7066 | 1.775-1.795 | 1.565-1.635 |
| Dry whey (¢/lb.) | 59.02 | 64.0-66.0 | 56.0-59.0 |
| Source: USDA World Ag Supply & Demand | |||
| Estimates report, Sept. 11, 2014 | |||
| USDA feed price* outlook | |||
| Estimated | Forecast | Forecast | |
| Product | 2012/13 | 2013/14 | 2014/15 |
| Corn ($/bu.) | 6.89 | 4.45 | 3.20-3.80 |
| Soybeans ($/bu.) | 14.40 | 13.00 | 9.00-11.00 |
| Soy meal ($/ton) | 468 | 490 | 3.30-3.70 |
| *U.S. average price paid at the farm level | |||
| Source: USDA World Ag Supply & Demand | |||
| Estimates report, Sept. 11, 2014 | |||
