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Wednesday, December 13, 2017
 USDA World Agricultural Supply and Demand Estimates Report  

The USDA lowered its milk production outlook for 2016 and 2017, citing slower than expected growth in the U.S. dairy herd in it's latest report. Fat basis exports are raised for 2016 on higher butter exports, and skim-solids basis exports are increased on stronger sales of lactose.  For 2017, fat basis exports are reduced on expected increased competition in cheese markets, but strength in lactose and nonfat dry milk (NDM) exports are expected to support higher skim-solids basis exports.  Import forecasts are lowered from last month for both fat and skim-solids bases.  Fat basis ending stock forecasts for 2016 and 2017 are raised on higher expected cheese stocks.  Although the skim-solids basis ending stock forecast for 2016 is raised on higher-than-expected cheese and NDM stocks, the forecast for 2017 is unchanged as robust NDM exports are expected to draw down stocks during the year.

  

Price forecasts for cheese and butter are raised for 2016 on current price strength, but the forecasts for NDM and whey prices are unchanged.  Product prices are forecast higher for 2017 as domestic demand strength is expected to carry into next year and higher export demand will support NDM and whey prices.  As a result of the higher cheese and butter price forecasts, Class III and Class IV price forecasts are raised for 2016.  Class III and IV prices are forecast higher for 2017 on higher component product prices.  All milk prices are forecast higher at $16.05 to $16.15 per cwt for 2016 and $16.85 to $17.65 per cwt for 2017.  


Fat basis exports are raised for 2016 on higher butter exports, and skim-solids basis exports are increased on stronger sales of lactose.


For 2017, fat basis exports are reduced on expected increased competition in cheese markets, but strength in lactose and nonfat dry milk (NDM) exports are expected to support higher skim-solids basis exports.


Import forecasts are lowered from last month for both fat and skim-solids bases.


Fat basis ending stock forecasts for 2016 and 2017 are raised on higher expected cheese stocks.


Although the skim-solids basis ending stock forecast for 2016 is raised on higher-than-expected cheese and NDM stocks, the forecast for 2017 is unchanged as robust NDM exports are expected to draw down stocks during the year.


Price forecasts for cheese and butter are raised for 2016 on current price strength, but the forecasts for NDM and whey prices are unchanged.


Product prices are forecast higher for 2017 as domestic demand strength is expected to carry into next year and higher export demand will support NDM and whey prices.


As a result of the higher cheese and butter price forecasts, Class III and Class IV price forecasts are raised for 2016. Class III and IV prices are forecast higher for 2017 on higher component product prices.


All milk prices are forecast higher at $16.05 to $16.15 per cwt for 2016 and $16.85 to $17.65 per cwt for 2017.

Source: USDA
 


Posted on Thursday, December 15, 2016 (Archive on Thursday, December 22, 2016)
Posted by bholcomb@adpi.org  Contributed by bholcomb@adpi.org
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