The USDA raised its 2013 milk production forecast by 100 million pounds in this month’s World Agricultural Supply and Demand Estimates (WASDE) report issued last week, based on production data for the second quarter, but subsequent quarters were unchanged. Production for 2014 was unchanged. 2013 milk production is now expected to hit 202.1 billion pounds. 2014 output remains at 204.5 billion, a 1.2 percent increase from 2013 if realized.

Fat-basis ending stock forecasts for 2013 and 2014 were lowered as lower prices are expected to support greater butter use. The skim-basis stock forecast was unchanged for 2013 but lowered for 2014 as domestic demand for nonfat dry milk (NDM) is expected to improve. Robust demand for NDM supports increased price forecasts for 2013 and 2014. The cheese price forecast for 2013 was raised on relatively strong demand, but the forecast was unchanged for 2014.

Butter prices were forecast lower for both 2013 and 2014 as stocks are relatively high. The whey price forecast was unchanged from last month. For 2013, the Class III price was raised from last month on the stronger cheese price, but the 2014 price was reduced on a lower butterfat price. The Class III average for 2013 is now forecast at $17.80-$18 per cwt., up from the $17.65-$17.95 expected a month ago, and compares to $17.44 in 2012. The 2014 average is now put at $16.55-$17.55, down a nickel from last month.

The range of the 2013 Class IV price was narrowed for 2013 but unchanged at the midpoint as the lower butter price is largely offset by the higher NDM price. The Class IV price is expected to average $18.25-$18.55 per cwt., compared to the $18.20-$18.60 projected last month and compares to $16.01 in 2012. The 2014 Class IV price was unchanged at $17.65-$18.75.

The WASDE also projected the season-average farm price for corn up a dime at both ends of the range, to $4.50-$5.30 per bushel. Prices received by farmers are expected to remain above cash bid levels through the fall as producers who forward-priced corn earlier in the year support the weighted average farm-gate price. The U.S. season-average soybean price for 2013/14 was forecast at $10.35-$12.35 per bushel, up 60 cents on both ends. Soybean meal prices are forecast at $305-$345 per ton, up $15 at the midpoint.
 

USDA’s latest Crop Production report showed smaller-than-expected corn and soybean harvests, according to DairyBusiness Update (DBU). The 2013 corn planted area for all purposes is estimated at 97.4 million acres, the largest planted area since 1936. Area to be harvested for grain is forecast at 89.1 million acres, unchanged from the June forecast. 

USDA forecast the 2013 corn harvest at 13.8 billion bushels, up 28 percent from 2012 and a new U.S. record. Yields were expected to average 154.4 bushels per acre, up 31 bushels from 2012 and the highest average yield since 2009. 

Soybean production is forecast at 3.26 billion bushels, the third-largest crop on record. Area for harvest is forecast at 76.4 million acres, down less than 1percent from June, but up slightly from 2012. The first survey-based soybean yield forecast  is 42.6 bushels per acre, up 3 bushels from last year’s drought-reduced yield, and fifth highest on record, reports DBU.

DBU also reports that dairy farmers seeking cottonseed won’t be getting much help from the Southern Plains. While official survey numbers haven’t been released, a Texas A&M AgriLife Extension Service expert estimates South Plains cotton abandonment will be about 40 percent.

Mark Kelley, AgriLife Extension cotton specialist, said conditions have actually improved slightly from a couple of months ago. Like most of Texas, the region had a cooler-than-normal spring and late freezes, while remaining areas were locked in the stranglehold of drought. There was also hail, high winds and blowing sand. Many dryland and re-plantings of hailed-out or blown-out fields were late, bumping right up against the crop insurance planting deadlines.

Kelley noted there hasn’t been anything resembling “typical” for years, but typical abandonment rates are about 25 percent. And, in the last few years, a larger percentage of cotton is being planted dryland, which usually has a higher abandonment rate. Currently, about 53-57 percent of the region’s cotton is dryland, he said. The region typically produces about 60-65 percent of the state’s cotton. This year, there were 3.7 million acres planted in the South Plains. USDA estimates 2013 cottonseed production at 4.367 million tons, down nearly 1.3 million tons from 2012 and the smallest cottonseed harvest since 2009.

Cotton Incorporated’s Tom Wedegaertner said there’s a fairly high level of abandonment and explained that there are any number of reasons why the crop would be abandoned, such as hail, drought, and wind which can damage that cotton plant and not let it get to maturity where it can produce fiber and seeds.

Wedegaertner said he has been in several parts of the country examining the crop, like Texas, Mississippi, and the Southeast, and “Universally across the cotton belt we’re seeing cotton fairly well behind schedule, two or three weeks and mostly due to cool wet weather.” He adds that Mississippi is talking about it being the coolest summer on record and “cotton is a heat-loving plant.” “Without those heat units it just doesn’t mature so right now we’re really hoping for a late fall,” he said. “If we get an early fall, the yields on cotton will be drastically reduced because the cotton crop is so far behind normal.”

He also warned that “Cottonseed is not going to be cheap in the coming year.” There’s already been a reduction in acreage of about 17 percent, according to Wedegaertner, and “We’re predicting a reduction of cottonseed yield, somewhere in the range of 800,000-900,000 tons less cottonseed produced this year compared to last year.” “If we have a delayed crop and an early fall we’re going to reduce that even further,” he concluded, “And that does not bode well for prices for dairy farmers.” For more details, log on to www.wholecottonseed.com

The views and opinions expressed in this column are those of the author and not necessarily those of Farm World. Readers with questions or comments for Lee Mielke may write to him in care of this publication.