Search Site   
Current News Stories
Discretionary buying being seen in commodity market
Santa to visit Apple Farm Service locations
Savannah Robin named Kentucky Farm Woman of the Year
Ohio Maple Days an event for all  maple syrup producers
American Soybean Association expanding staff in D.C., St. Louis
Global ag tractor market will grow over next 10 years
Cattle-killing tick is spreading across Ohio
Indiana Hunt for Hunger
Severe weather possible in the region in December
US October milk production remains below a year ago
Deer overpopulation a problem with farmers
News Articles
Search News  
USDA lowers milk production forecasts for 2023 and 2024
Mielke Market Weekly
By Lee Mielke
The Agriculture Department again lowered its milk production forecasts for 2023 and 2024 in its latest World Agriculture Supply and Demand Estimates, based on “an expected decline in cow numbers reflecting the average July 2023 cow number reported in the recent Milk Production report. The reduction in cow numbers is expected to continue through 2023,” the report said, “and into the first half of 2024 as returns remain under pressure.”
Output-per-cow for 2023 was forecast to increase at a lower rate than previously expected on recent data and the expected impact of high temperatures during the summer. The forecast of milk per cow for 2024 was unchanged.
2023 production and marketings were estimated at 227.5 and 226.5 billion pounds respectively, down 400 million pounds on both from a month ago. If realized, production would still be up 1.0 billion pounds or 0.4 percent from 2022.
2024 production and marketings were projected at 230.4 and 229.4 billion pounds respectively, down 100 million pounds on both. If realized, 2024 production and marketings would be up 2.9 billion pounds or 1.3 percent from 2023.
Price forecasts for 2023 cheese, butter and whey were raised, based on current price strength, but nonfat dried milk (NDM) was lowered. Cheese is expected to average $1.81 per pound in 2023, up 3.50 cents from last month’s estimate, and compares to $2.1122 in 2022 and $1.6755 in 2021. It’s expected to average $1.8450 per pound in 2024, up 9 cents from a month ago.
Butter will average $2.54 per pound in 2023, up 4.50 cents from last month’s projection, and compares to $2.8665 in 2022 and $1.7325 in 2021. It is projected to average $2.55 per pound in 2024, up 12 cents from last month’s estimate.
Nonfat dry milk was projected to average $1.16 per pound in 2023 and $1.09 in 2024. Dry whey was projected at 34.5 cents in 2023 and 31.50 cents in 2024.
Class III and Class IV milk price estimates were raised, reflecting changes in their component values. Look for the 2023 Class III to average $17.35 per cwt., up 45 cents from last month’s estimate, and compares to $21.96 in 2022 and $17.08 in 2021. The 2024 projection is $17.55, up $1 from last month’s estimate.
The 2023 Class IV price will average $18.60, according to the report, up a dime from a month ago, and compares to $24.47 in 2022 and $16.09 in 2021. The 2024 Class IV will average $18.00, up 20 cents from last month’s estimate.
The Cheddar blocks alternated some the week of September 11, but fell to a $1.88 per pound close Friday, as traders anticipated Monday afternoon’s August Milk Production report. The blocks were down 4.50 cents on the week, lowest CME price since July 27, and 18 cents below that week a year ago when they were trading at $2.06 per pound. Class III futures have fallen as well.
The barrels closed Friday at $1.81, down 1.75 cents on the week, 28 cents below a year ago when they were up almost 16 cents to $2.09, and were 7 cents below the blocks. There were 15 loads of block traded on the week and 6 of barrel.
StoneX reported that the milk supply is tighter but there’s a bleak view on demand ahead, and the lack of cheese exports makes market direction uncertain.
Midwest cheesemakers say milk was still somewhat snug this week, according to Dairy Market News, but near-term expectations are that availability will grow with improved cow comfort weather. Spot milk prices were still above Class III but have edged lower. Cheese orders are somewhat steady but vary plant to plant. Some remain concerned about fulfilling incoming orders while others say tighter milk has brought some balance in cheese inventories.
The July U.S. Dairy Supply and Utilization report (DSU) this week pulled back the curtain a bit. HighGround Dairy economist Betty Berning noted in the September 18 Dairy Radio Now broadcast, the strong domestic usage. She said the July export data had a lot of red in it but the DSU showed domestic cheese, butter and powder disappearance was up from a year ago and cited dry whey as an example. Dry whey exports were down nearly 43 percent in July, she said, while domestic whey disappearance was up 47 percent, leaving total utilization flat.
Total cheese consumption was up 2.5 percent from a year ago, thanks to a 2.8 percent gain in domestic utilization, particularly of American cheese, says HGD, which offset the minor decline in other-cheese domestic use. Total cheese exports were slightly below 2022 volumes.
In politics, the Agriculture Department announced this week that it will provide financial assistance to dairy farmers affected by natural disasters. The National Milk Producers Federation praised the action. NMPF stated, “The Milk Loss Assistance program will compensate eligible dairy farms and processors for milk dumped due to qualifying disaster events in 2020, 2021 and 2022, including droughts, wildfires, hurricanes, floods, derechos, excessive heat, winter storms and smoke exposure.”
NMPF president and CEO, Jim Mulhern, stated, “On top of the challenges created by wild price gyrations and the COVID-19 pandemic, dairy farmers since 2020 have also faced an inadequate federal mechanism for addressing unforeseen weather catastrophes, further straining finances at a time when strains have been hard to bear. NMPF never accepted that situation, and we’re very appreciative of USDA’s diligent work over several months to finalize the compensation plan that will address this backlog of disaster assistance.”
Lawmakers in Washington were told this week that limiting full-fat dairy is no longer science-based. Roberta Wagner, senior vice president for regulatory and scientific affairs with the International Dairy Foods Association (IDFA), provided oral testimony to the 2025 Dietary Guidelines Advisory Committee (DGAC), a panel of 20 nutrition and public health experts tasked with providing a scientific report to inform the federal government’s next update to the Dietary Guidelines for Americans (DGA).
In her testimony, Wagner stressed that 90 percent of Americans do not consume enough dairy to meet dietary recommendations, according to the 2020-2025 DGA report. She urged the committee to “maintain nutrient-rich dairy foods as a central part of a healthy diet,” and stressed that “new science shows that limiting dairy based on fat level, as current guidelines recommend, does not lead to better health outcomes.”
She stated that “an overwhelming body of scientific evidence demonstrates that dairy should be part of healthy eating patterns for all Americans, at all life stages and with various dietary needs.
“The DGA have long recognized the inherent benefits of dairy products, including milk, yogurt and cheese, as important sources of nutrients and associated with better health outcomes. At a time when people are not meeting DGA recommendations for dairy, deterring intake due to fat level is not science-based, nor is it in the best interest of public health,” Wagner charged.
NMPF’s Regulatory Affairs Director, Miquela Hanselman, along with an Olympic athlete and dairy farmer, Elle St. Pierre, also testified at the DGA, stating, “Dairy is a critical component of diet that should be considered in light of its full range of benefits.”