In its December World Ag Supply and Demand Estimates (WASDE) report, the USDA once again lowered its milk production forecast for 2023 – down 2 million lbs. to 226.9 billion. The forecast is lowered from last month due to slower expected growth in milk per cow. Production in 2024 was also lowered from 230 billion to 229 billion lbs. due to lower milk cow numbers and reduced milk per cow.
Due to lower exports, butter prices were lowered to $2.62 per lb., down only 2.5 cents from last month, yet nearly 25 cents lower from the same period last year. Butter price forecasts remained relatively the same for 2024 at $2.595 per lb. The fat basis import forecast for 2023 was raised due to higher imports of cheese, however, skim- solids imports were lowered due to fewer shipments of milk protein products. For 2024, the import forecast is raised on a fat basis, but lowered on a skim-solids basis. Fat basis exports are lowered for 2024 on lower expected butter shipments, while a higher skim-solids basis forecast reflects higher nonfat/skim powder and whey product exports.
Cheese prices were lowered slightly for 2023, dropping only .5 cents. However, 2024 painted a different picture with prices dropping to $1.72 per lb., down 10 cents from last month. Thanks to both lower cheese and butter prices, the Class III and Class IV price forecasts were also lowered for 2023. Class III prices were lowered 5 cents to $17.05 per cwt in 2023. Meanwhile, the 2024 Class III price took a hit on the chin, dropping 85 cents to $16.85.
Class IV 2023 price predictions dropped 10 cents from last month to $19.10 per cwt. while 2024 Class IV forecasts were raised 5 cents to $18.90. The all-milk price for 2023 also saw a decline of 10 cents and now stands at $20.60, down $4.74 when compared to 2022. For 2024, the all-milk price currently sits at $20.25 per cwt., down 60 cents from last month’s 2024 predictions.
