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USDA raises 2022-23 milk production forecasts, puts dent in price projections

USDA’s monthly World Egg Supply and Demand Estimates (WASDE) report, released on August 12, 2022, showed that 2022-23 US milk production was revised up due to a larger cow inventory and an increase in milk production per cow. Projected average all milk prices have been reduced for both years.

  • Compared to last month, the USDA raised its 2022 milk production forecast by 800 million pounds to 226.8 billion pounds. If realized, 2022 production would increase by 500 million pounds from 2021.

Butter price forecasts for 2022 have been raised from last month on current price strength, while cheese prices are forecast to be lower on large supplies and continued large stocks. Price forecasts for nonfat dry milk (NDM) and whey prices have also been lowered.

Compared to a month ago, the projected 2022 annual average Class III price was down $1.20, to $21.60 per hundredweight (cwt). The projected Class IV price was cut 75 cents, to $23.95 per cwt. The all-milk price forecast for 2022 was cut 95 cents from last month to $25.20 per cwt. (As of the close of trading on the Chicago Mercantile Exchange on August 11, 2022, Class III and Class IV milk futures averaged $21.97 and $23.79 per cwt, respectively.)

  • For 2023, the USDA projects milk production at 229.2 billion pounds, 900 million pounds more than last month’s forecast. If realized, 2023 production would increase by 1% over the 2022 estimate.

Cheese, butter, NDM and whey price forecasts for 2023 have been lowered on expectations of oversupply and strong competition in international markets. With lower product prices, Class III milk prices are forecast at $19.70 per cwt, down $1.15 from last month’s projection. Class IV milk prices were forecast down $1.95 to $20.35 per cwt. All milk prices were forecast down $1.65 to $22.50 per cwt.(As of the close of CME trading on Aug. 11, 2023 Class III and Class IV milk futures averaged $19.57 and $19.71 per cwt, respectively.)

Beef production, price outlook

Beef production estimates for 2022 have been raised with more slaughter expected in the second half of the year. The beef forecast for 2023 has been increased, reflecting higher expected placements in late 2022.

The cattle price forecast for 2022 was raised slightly from last month. USDA estimates annual average prices for 2022 at $142 per cwt, about $20 higher than the 2021 average of $122.40 per cwt. The estimated 2023 annual average price for pastured cattle was $154 per cwt, $1 higher than last month’s forecast.

Feed price, production forecasts

WASDE and Crop Production Reports provide some updated feed supply and demand estimates and price projections:

  • Corn: This month’s 2022-23 US corn outlook called for lower supplies, lower feed and residual use, slightly higher feed, seed and industrial use, smaller exports and lower ending stocks.

Harvested area for grain is forecast at 81.8 million acres, less than 1% from the previous forecast and down 4% from last year. Corn production for 2022 is forecast at 14.4 billion bushels, down 5% from 2021 but still the fourth highest production on record. The first survey-based corn yield forecast for the season was 175.4 bushels per acre, down 1.6 bushels from last month’s projection. Among the major producing states, the Crop Production Report predicts yields a year ahead in Illinois, Minnesota and South Dakota; Indiana, Missouri, Nebraska and Ohio a year ago; And that hasn’t changed in Iowa.

At $6.65 per bushel, the projected season-average corn price received by producers was unchanged from last month’s forecast, but it was up 70 cents (12%) from the 2021-22 average of $5.95 and about $2.12 (47%). The 2020-21 average is more than $4.53 per bushel.

  • Soybeans: The 2022-23 US soybean supply and consumption outlook projects higher opening stocks, production, exports and ending stocks than a month ago.

Soybean production for 2022-23 is forecast at 4.53 billion bushels, up 26 million bushels from the July forecast, with higher yields offsetting lower harvested area. Harvested area was down 0.3 million acres from July but was down 1% from 2021 forecast at 87.2 million acres. The first survey-based soybean yield forecast of 51.9 bushels per acre was up 0.4 bushels from last month.

The 2022-23 US season-average soybean price is forecast at $14.35 per bushel, down 5 cents from last month, but up $1.05 (8%) from $13.30 and $3.55 (33%) for 2021-22. Averaged $10.80 per bushel in 2020-21.

The 2022-23 soybean meal price is forecast at $390 per tonne, unchanged from last month’s forecast and down $45 (10%) from the 2021-22 average of $435 per tonne and $2.30 (0.6%) below the 2020-21 average. .

  • hey: Alfalfa and alfalfa blend dry hay production is forecast at 49.1 million tonnes for 2022, down less than 1% from 2021. August Based on the conditions of 1, the yield is expected to average 3.17 tonnes per acre, down by 0.06 tonnes from last year. Harvested area is forecast at 15.5 million acres, unchanged from the June USDA acreage report, but up 1% from 2021. Record-high yields are forecast for Idaho and Wyoming.

Other straw production is forecast at 67.7 million tonnes, down 5% from 2021. August Based on conditions for 1, US yields are expected to average 1.88 tons per acre, down 0.12 tons from last year. Harvested area is forecast at 36 million acres, unchanged from the acreage report, but up 2% from 2021. Record-high yields are expected in California.

  • Cottonseed: The US 2022-23 cotton outlook calls for the lowest production since 2009-10 – the crop has been reduced by abandoning historically high acreage projected in the Southwest. As a result, the cottonseed harvest is estimated at only 3.8 million tons, a decrease of 1.5 million tons (28%) from 2021. The final mark
Dave Natzke

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