June projected corn prices were lowered slightly from May to $4.45 - $4.65 per bushel for 2013/14, based on reported prices to date. The 2014/15 corn price is forecast below current year prices but is unchanged from the May projection of $3.85 - $4.55 per bushel. The soybean meal price for 2013/14 is estimated at $485 per ton. The 2014/15 soybean meal price forecast is unchanged from May but is expected to be sharply lower than this year at $355 - $395 per ton. The preliminary alfalfa price was reported in the May Agricultural Prices report at $224 per ton; higher than April’s reported price and about the same as May a year ago. Consequently, the milk-feed price ratio is likely to remain at a level that would support expansion in the dairy herd in 2015.
Last month’s forecast of herd expansion in the second half of the year was based on strong milk prices and moderating feed costs. The June forecast is unchanged from May and cow numbers are placed at 9,255 thousand head for the current year. Cow numbers for 2015 are forecast up slightly from 2014 to 9,340 thousand head, also unchanged from the May forecast. Current-year output per cow is lowered fractionally from May to 22,270 pounds per cow and is based on lower expected output per cow in the second quarter. Next year’s forecast of output per cow is unchanged from May and is up nearly 2 percent from the 2014 projection. The June milk production forecast for 2014 rounds to 206.1 billion pounds, unchanged from May. For 2015, milk production is unchanged from May at 212.1 million pounds. The likely stronger milk-feed price ratios for both this year and next should presage expanded year-over-year production.
Fats basis 2014 milk equivalent imports were raised in June to 3.5 billion pounds, but are expected to slip to 3.4 billion pounds in 2015. Skims-solids basis milkequivalent imports are raised this month to 5.6 billion pounds for the current year and to 5.2 billion pounds for 2015. The forecast increases from May are based on higher imports of food preparation items, whey products, and, to a lesser extent, casein and milk protein concentrates.
June forecast fats-basis exports for 2014 are increased this month from May to 13.4 billion pounds and to 13 billion pounds for 2015. Butter exports have retreated as U.S. prices have become less competitive on the global market. The butter decline was more than offset by continued strong cheese exports. The higher June forecasts are expected to carry over into 2015. However on a year-over-year basis, the 2015 forecast export decline is based on expected strong foreign competition. Exports on a skims-solids basis are increased to 39.4 billion pounds for 2014 and are unchanged at 38.6 billion pounds for next year. Higher skimmed milk powder, whey, and cheese are the basis of the higher skim-solids export number this year. Although the United States is expected to remain competitive in the global market, foreign competition will likely lower exports on a year-over-year basis in 2015.
Fats basis ending stocks are lowered for 2014 based on lower than expected butter stocks, a likely result of lower butter production and strong domestic demand. Fats basis ending stocks are unchanged this month from May. Skims-solids ending stocks for both 2014 and 2015 are unchanged this month from May forecasts. Although June price forecasts are higher than May for some dairy products, on a year-over-year basis prices will be lower in 2015 than in 2014. Greater milk production and slightly lower exports explain the forecast price scenario. The 2014 cheese price range is raised this month to $2.015 - $2.055 per pound based on robust year-to-date demand. Cheese price forecasts are unchanged for 2015 at $1.670 - $1.770 per pound. Forecast butter prices are raised to $1.870 - $1.940 per pound for 2014 based on apparent demand strength and tight supplies and to $1.640 - $1.770 per pound next year. Current year whey prices are unchanged from May, at 63.0 – 65.0 cents per pound and 55.0 – 58.0 cents per pound for 2015. Nonfat dry milk (NDM) prices are lowered slightly to $1.820 - $1.860, based on lower reported May prices. However as prices have appeared to rebound, the forecast for
the balance of 2014 is unchanged. NDM prices for 2015 are unchanged from May at $1.605 - $1.675 per pound.
The Class IV price forecast is increased for both this year and next as higher butter prices more than offset lower NDM prices. The Class IV price is forecast at $21.45 – $21.95 per cwt for this year and $18.65 - $19.75 per cwt for 2015. The June Class III milk price forecast is raised to $20.80 - $21.20 per cwt for the current year and raised fractionally to $16.95 - $17.95 per cwt for 2015. The all milk price forecast is increased from May for both 2014 and 2015 to $22.90 - $23.30 and $19.75 - $20.75 per cwt, respectively.
Source: USDA