| USDA dairy price forecasts | |||
| Estimated | Forecast | Forecast | |
| Product | 2013 | 2014 | 2015 |
| Class III ($/cwt) | 17.99 | 22.40-22.50 | 17.25-18.15 |
| Class IV ($/cwt) | 19.05 | 22.40-22.60 | 17.45-18.45 |
| All milk ($/cwt) | 20.05 | 24.10-24.20 | 18.95-19.85 |
| Cheese ($/lb.) | 1.7683 | 2.160-2.170 | 1.695-1.785 |
| Butter ($/lb.) | 1.5451 | 2.200-2.250 | 1.680-1.800 |
| NFDM ($/lb.) | 1.7066 | 1.760-1.780 | 1.450-1.520 |
| Dry whey (¢/lb.) | 59.02 | 65.0-66.0 | 56.0-59.0 |
| Source: USDA World Ag Supply & Demand | |||
| Estimates report, Oct. 10, 2014 | |||
| USDA feed price* outlook | |||
| Estimated | Forecast | Forecast | |
| Product | 2012/13 | 2013/14 | 2014/15 |
| Corn ($/bu.) | 6.89 | 4.46 | 3.10-3.70 |
| Soybeans ($/bu.) | 14.40 | 13.00 | 9.00-11.00 |
| Soy meal ($/ton) | 468 | 490 | 330-370 |
| *U.S. average price paid at the farm level | |||
| Source: USDA World Ag Supply & Demand | |||
| Estimates report, Oct. 10, 2014 | |||
USDA’s Oct. 11 World Ag Supply & Demand Estimates report reduced projected 2014 milk production based on slower-than-expected growth in output per cow, but raised estimates for 2015 with growth in output per cow expected to rise with relatively lower-priced feed.
• 2014 milk production and marketings were projected 200 million lbs. lower, at 206.1 billion lbs. and 205.1 billion lbs., respectively. If realized, 2014 production and marketings would be up about 2.4% from 2013.
• 2015 production and marketings were projected 300 million lbs. higher, at 212.8 billion lbs. and 211.8 billion lbs., respectively. If realized, 2015 production and marketings would be up about 3.3% from 2014.
Export forecasts for 2014 were lowered as U.S. dairy prices are less competitive, but import forecasts were raised as relatively high U.S. prices encourage larger imports. The trade forecasts for 2015 were unchanged.
Compared to a month ago, 2014 butter, cheese and whey price forecasts (see table) were raised, as domestic demand continues to support prices. Projected prices of these products were unchanged for 2015. However, the nonfat dry milk (NDM) price forecasts for both 2014 and 2015 were reduced, as U.S. prices are expected to decline to increase the competitiveness of NDM exports.
The projected 2014 Class III price was raised on stronger cheese and whey prices, but is unchanged for 2015. The projected Class IV price was raised for 2014, as higher butter prices more than offset the decline in NDM prices. For 2015, the lower forecast NDM price results in a lower Class IV price. The all-milk price was raised to $24.10-$24.20/cwt. for 2014, but lowered to $18.95-$19.85/cwt. in 2015.
Beef prices steady
Affecting cull cow prices, October beef steer price projections for 2014 and 2015 were mostly steady with September’s estimates. The 2014 annual average is projected at $153/cwt.; the 2015 average is projected in a range of $149-$162/cwt., with highest prices expected during the first half of the year.
The forecasts for total 2014-2015 beef production were raised, driven by heavier carcass weights as lower corn prices encourage producers to market heavier cattle. Projected 2014 and 2015 beef imports were unchanged; exports for 2014 were lowered based on recent trade data, but the forecast for 2015 was unchanged.
Feed situation
In addition to USDA’s WASDE report, the Oct. 10 Crop Production report also figures into the feed price outlook. Projected 2014/15 U.S. feed grain production was raised, driven by higher forecast corn production.
Corn production was forecast at a record 14.475 billion bushels, as lower reported area is more than offset by a 2.5-bushel-per-acre increase in the yield. Corn supplies for 2014/15 are projected at 15.736 billion bushels, up 129 million from last month. Projected imports are lowered 5 million bushels, with tighter corn supplies in Canada.
Projected U.S. corn use for 2014/15 was raised 50 million bushels on higher expected feed and residual disappearance driven by the larger crop, higher projected meat production, and the lower price outlook. Corn ending stocks are raised 79 million bushels to 2.081 billion bushels.
The projected range for the season-average farm price for corn was lowered 10¢ on each end, to $3.10-$3.70/bushel.
Soybean production is forecast at a record 3.927 billion bushels, with improved yields more than offsetting reduced harvested area. The soybean yield is projected at 47.1 bushels per acre, up 0.5 bushels from September. Harvested area is reduced 0.7 million acres to 83.4 million. Soybean supplies for 2014/15 are projected 24 million bushels below last month.
U.S. soybean exports and crush for 2014/15 are unchanged this month. Soybean ending stocks are projected at 450 million bushels, down 25 million on reduced supplies.
Prices for soybeans and soybean meal were unchanged for 2014-15. The U.S. season-average soybean price was projected at $9.00-$11.00/bushel. Soybean meal prices were projected at $330-$370/ton.
