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Thursday, December 14, 2017
 USDA Projects Four Years of Declining Milk Prices  

USDA is forecasting a large drop in milk prices this year followed by three years of slower declines before stabilizing. Domestic use and exports of dairy products are forecast for continued growth.


USDA is forecasting a significant downturn in milk and dairy product prices in 2015, with the all-milk price falling $4.90 per hundredweight and the cheese price retreating 45 cents per pound.


Decreases in subsequent years are less dramatic, but an increase in milk prices aren’t expected until 2021 and an increase in the cheese price is not expected until 2022, according to the agency’s long-term projections released this month.


The all-milk price is expected to drop to $18.05 by 2018, stabilize for a couple of years then move higher to reach $19.20 by 2024, USDA economists reported.


Milk production is projected to continue its long-term upward trend, increasing 37.1 billion pounds from 212.3 billion pounds in 2015 to 249.4 billion pounds by 2024, with favorable returns encouraging expansion of the herd through 2018.


Milk per cow is expected to rise more than 4,000 pounds over the next 10 years, from 22,770 pounds in 2015 to 27,060 pounds by 2024, the economists project.


The agency forecasts higher feed costs will bring year-to year declines in the number of cows from 2020 through 2024. Production per cow, however, will continue upward, reflecting continued developments in technology and genetics.


Future demand for dairy products looks bright in USDA’s projections, with domestic commercial use growing faster than the U.S. population. While per-capita consumption of fluid milk is expected to continue its slow decline, domestic demand for cheese is expected to rise due to greater consumption of prepared foods and increased eating away from home.


The economists project domestic commercial use (on a milk fat basis) to rise from 202.6 billion pounds in 2015 to 234.6 billion pounds in 2024.


The upward trend in dairy exports is also projected to continue, with the U.S. well positioned to expand exports, according to USDA.


Commercial exports (on a milk fat basis) are projected to increase steadily over the next decade, reaching record levels and growing from 11 billion pounds in 2015 to 17.9 billion pounds in 2024, the economists reported.


Imports of dairy products are projected to remain fairly steady, between 3.8 billion pounds and 4.1 billion pounds over the next 10 years.


Source: USDA 

 


Posted on Thursday, February 19, 2015 (Archive on Thursday, February 26, 2015)
Posted by bholcomb@adpi.org  Contributed by bholcomb@adpi.org
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