Weekly Digest: USDA cuts 2022-23 milk production forecast, raises 2023 price projections

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Summary Highlights

The USDA’s World Ag Supply and Demand Estimates (WASDE) monthly report, released July 12, 2022, again revised down estimates of 2022-23 U.S. dairy production due to slower milk growth per cow. Despite lower production prospects in 2022, projected milk prices at the farm level remained stable or slightly lower for 2022, but increased for 2023 compared to last month’s price projections.

  • Compared to last month, the USDA has cut the 2022 milk production forecast by 400 million pounds to 226 billion pounds. If realized, 2022 production would be down 300 million pounds from 2021.

The butter price forecast for 2022 was raised from last month on firm demand, but the price of cheese was expected lower on still large inventories. Price forecasts for skimmed milk powder (SMP) and whey prices are unchanged.

Compared to a month ago, the expected annual average price for Class III in 2022 has been reduced by 10 cents to $22.80 per hundredweight (cwt). The Class IV projected price has been increased by 5 cents to $24.70 per cwt. The price forecast for all milk for 2022 was reduced by 5 cents from last month to $26.15 per cwt.

  • For 2023, the USDA has forecast milk production of 228.3 billion pounds, down 1 billion pounds from last month’s forecast. If realized, 2023 production would be up about 1% from the 2022 estimate.

Price forecasts for 2023 for cheese, butter and NDM were raised due to an expected drop in production, but price forecasts for whey were lowered due to an expected drop in international prices.

The annual average price projects for 2023 were as follows: Class III – $20.85 per cwt, Class IV – $22.30 per cwt and all milk – $24.15 per cwt.

The USDA Cattle report, to be released July 22, will provide a mid-year estimate of dairy cow inventory and producer intentions regarding heifer retention for dairy cow replacement.

  • Beef production, price outlook: The 2022-23 beef production estimate has been lowered slightly due to lower carcass weights expected in early 2023. Livestock price forecasts for 2022 have been raised slightly from last month. The USDA has estimated 2022 annual average prices for fed cattle at about $141 per cwt, about $19 higher than the 2021 average of $122.40 per cwt. The estimated 2023 annual average price for fed cattle was $153 per cwt, unchanged from last month’s forecast. The USDA Cattle Report will provide an indication of producers’ intentions regarding heifer retention and the 2022 calf crop.
  • Slightly lower crop price forecast: The WASDE report provided updated estimates of feed supply and demand and price projections:
  • Corn: This month’s U.S. corn outlook for 2022-23 called for larger supplies and higher ending stocks. At $6.65 a bushel, the expected seasonal average price for corn received by growers was down 10 cents from last month’s forecast, but still up 70 cents (12%) from the 2021-22 average of $5.95 per bushel and about $2.12 (47%) higher than the 2020-21 average of $4.53 per bushel.
  • Soy : The U.S. soybean supply and utilization outlook for 2022-23 projected lower production than a month ago. With lower supplies only partially offset by lower usage, ending stocks for 2022-23 are projected at 230 million bushels, down 50 million from last month. The 2022-23 U.S. season average soybean price is forecast at $14.40 a bushel, down 30 cents from last month, $1.05 (8%) higher than the 13 average, $35 per bushel for 2021-22 and $3.60 (33%) higher than the $10.80 per bushel average in 2020-21. The 2022-23 soybean meal price was forecast at $390 per ton, down $10 from last month’s forecast and down $35 (8%) from the 2021 average of $425 per ton- 22 and $2.25 lower than the 2020-21 average.
  • Cottonseed: For cottonseed, the 2022-23 U.S. cotton outlook forecast lower production and ending stocks compared to last month. While the USDA’s June 30 acreage report showed nearly 250,000 more acres planted than the previous National Ag Statistics Service (NASS) survey, harvested acreage is expected to be nearly 600,000 acres lower. this month, primarily due to acreage abandonment in Texas.

Southeast Milk Inc. (SMI) has announced the hiring of Christian Comstock as Transportation Manager. Comstock, who previously managed transportation operations for California Dairies Inc. (CDI), brings more than 25 years of dairy transportation experience to his new role.

SMI is a full-service dairy cooperative operating in six states. It markets nearly 1.8 billion pounds of milk annually on behalf of its nearly 130 members. Comstock will oversee the co-op’s food-grade haul business, which currently hauls more than 100 loads of milk and dairy products each day.

SMI previously announced that Shana Wooten, the co-op’s former chief operating officer, had returned as milk marketing manager.

The unique management structure of Associated Milk Producers Inc. (AMPI) will change effective January 2023, according to AMPI’s Chairman of the Board, Steve Schlangen, a dairy producer from Albany, Minnesota.

At that time, Donn DeVelder, who has shared the co-chairman and CEO roles with Sheryl Meshke since January 2015, will complete his term in that role, leaving Meshke as sole CEO of the Midwest Dairy Cooperative.

Meshke joined AMPI in 1991, and during her tenure she led communications, public affairs, human resources and strategic planning. Prior to becoming co-CEO, she was senior executive vice president responsible for strategic initiatives.

AMPI, headquartered in New Ulm, Minnesota, is owned by dairy farming families in Wisconsin, Minnesota, Iowa, Nebraska, South Dakota and North Dakota. AMPI members market approximately 4.9 billion pounds of milk annually, generating sales of $1.6 billion.

Hiland Dairy Foods announced the acquisition or lease of the dairy processing plants and branches of Borden Dairy in Texas.

Springfield, Missouri-based farmer-owned Hiland Dairy Foods Company operates 16 processing plants and 52 distribution centers in nine states, producing and marketing dairy and other beverages in Arkansas, Iowa, Kansas, Missouri, Mississippi, Nebraska, Oklahoma and Tennessee. and Texas.

Hiland Dairy’s expansion plan into Texas began 10 years ago when the company began distributing dairy products in select markets. In 2017, Hiland purchased three factories in Tyler, Texas.

Borden Dairy Texas locations are located in Forth Worth, Texarkana and San Antonio, Texas.

The House Ag Committee has created an online feedback form for dairy farmers and others to provide feedback as development of the 2023 Farm Bill continues.

House Ag Committee listening sessions are currently underway. (Read: Listening sessions to House Agriculture Committee farm bill hitting major dairy states.)

To provide additional opportunities for feedback, U.S. Representatives David Scott (D-Georgia), President, and Glenn Thompson (R-Pennsylvania), Ranking Member, announced an online Farm Bill feedback form.

In addition to feedback collected online, the House Agriculture Committee will continue to hold hearings in Washington, D.C. and hold listening sessions across the country to gather input in preparation for the 2023 Farm Bill. sessions are scheduled for July 22 in Carnation, Washington, and July 25 in Northfield, Minnesota.

dave natzke

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