The milk production forecasts for 2019 and 2020 in the recent WASDE report were raised from the previous month as stronger growth in milk per cow more than offsets a slower expected recovery in the cow inventory.
The 2019 fat basis import forecast is raised on recent trade data; the 2020 import forecast is unchanged. The fat basis export forecast for 2020 is lowered as higher domestic
cheese prices are expected to affect the competitiveness of U.S. cheese in international markets. The skim-solids basis import forecast for 2019 is reduced on lower imports of milk
protein products.
The 2020 forecast is unchanged. The 2019 skim-solids basis export forecast is raised on stronger sales of nonfat/skim milk powder (NDM/SMP). The 2020 forecast is unchanged as weak exports of cheese and whey products offset higher expected NDM/SMP sales.
Cheese and nonfat dry milk (NDM) price forecasts for both 2019 and 2020 are raised from last month on strength in demand. For both 2019 and 2020, butter and whey prices are lowered on current price weakness which is expected to carry into 2020.
The 2019 Class III and Class IV price forecasts are raised as the higher cheese price more than offsets the lower whey price. The 2019 Class IV price is raised as the higher NDM price more than offsets a weaker butter price, but for 2020, the lower butter price outweighs the higher NDM price and the Class IV price is reduced.
The 2019 all milk price forecast is raised to $18.60 per cwt; the 2020 all milk price is forecast unchanged at $18.85 per cwt.
