The Agriculture Department raised its 2017 milk production forecast in its latest World 
Agricultural Supply and Demand Estimates report, reversing five months of decreases, reasoning that “increases in milk per cow more than offset a slower rate of milk cow expansion.”
The 2018 forecast was reduced from last month’s report due to “slower growth in cow inventories.”
2017 production and marketings were projected at 216.0 and 215.0 billion pounds respectively, up 300 million pounds from last month. If realized, 2017 production would still be up 3.6 billion pounds or 1.7 percent from 2016.
2018 production and marketings were projected at 220.1 and 219.1 billion pounds respectively, down 200 million pounds from last month. If realized, 2018 production would be up 4.1 billion pounds or 1.9 percent from 2017.
Fat basis 2017 exports were reduced from last month due to “slowing cheese shipments, while fat basis imports were raised on increased purchases of butterfat. On a skim-solids basis, the export forecast for 2017 was lowered on weaker than expected skim milk powder sales, while the import forecast was raised due to stronger demand for a number of dairy products.”
The 2018 annual fat basis export forecast was unchanged from the previous month, but the import forecast was reduced on expected declining cheese imports. The skim-solids basis export forecast was reduced from the previous month as competition in international powder markets is expected to remain strong; imports are reduced on lower milk protein and cheese shipments.
Butter, NDM, and whey prices were forecast lower for 2017 while cheese prices were forecast higher. All 2018 product prices were reduced. The 2017 Class III milk price average was raised as higher forecast cheese prices offset lower whey prices. Look for a 2017 average of $16.15 per hundredweight, up 15 cents from last month’s forecast and compares to $14.87 in 2016 and $15.80 in 2015. The 2018 average was lowered to $16.50, down 30 cents from what was expected a month ago.
The Class IV price was reduced on lower butter and NDM. It is projected to average $15.55, down 35 cents from last month’s estimate and compares to $13.77 in 2016 and $14.35 in 2015. The 2018 Class IV average is now pegged at $15.65, down 60 cents from a month ago.
The Crop Production report stated that rainfall and flooding from Hurricanes Harvey and Irma will impact the data collected but updates will appear in the October report. It forecasts corn production at 14.2 billion bushels, down 6 percent from last year but up less than 1 percent from the August forecast.
Based on conditions as of September 1, yields are expected to average 169.9 bushels per acre, up 0.4 bushel from the August forecast but down 4.7 bushels from 2016. If realized, this will be the third highest yield and production on record for the United States. Area harvested for grain is forecast at 83.5 million acres, unchanged from the August forecast but down 4 percent from 2016.
Soybean production is forecast at a record 4.43 billion bushels, up 1 percent from August and up 3 percent from last year. Based on September 1 conditions, yields are expected to average 49.9 bushels per acre, up a half bushel from last month but down 2.2 bushels from last year. Area for harvest in the U.S. is forecast at a record 88.7 million acres, unchanged from August but up 7 percent from 2016.
Cotton production is forecast at 21.8 million 480-pound bales, up 6 percent from August and up 27 percent from last year. Yield is expected to average a record high 908 pounds per harvested acre, up 16 pounds from last month and up 41 pounds from last year.
Courtesy of the Mielke Market Weekly
