September WASDE USDA raises the 2019 milk production forecast and 2019 milk price estimates

In their September World Agriculture Supply and Demand Estimates (WASDE) report, USDA raised the 2019 milk production forecast and 2019 milk price estimates.  The milk production forecast for 2018 was reduced slightly on lower milk cow numbers and a slower rate of growth in milk per cow in the third quarter. However, the 2019 milk production forecast was increased on higher cow inventories. The dairy markets are not escaping impact from the tariffs and USDA reflected that in this month’s report. For 2018 and 2019, fat basis export forecasts are reduced from the previous month on slowing shipments of whey products and a number of other dairy products, USDA said. USDA lowered export forecasts for 2018 and 2019 on a skim-solids basis citing weaker whey product sales to China. However, skim-solids basis import forecasts for 2018 and 2019 are raised on continued strong purchases of cheese and other miscellaneous dairy products. Tariff aid product donations through the Commodity Credit Corporation reflect the recent pre-solicitation notice for the Trade Mitigation Food Purchase and Distribution Program, USDA said.USDA projects Cheese, NDM, and whey prices to be higher for the remainder 2018, but butter prices are lowered from the previous month. USDA boosted 2018 Class III price forecasts on improved cheese and whey prices. They also increased Class IV price forecasts as they expect NDM price improvements to more than offset lower butter prices. The all-milk price is raised to $16.30 to $16.50 per cwt for 2018 and $16.75 to $17.75 per cwt for 2019