On Tuesday USDA released the September Crop Production and WASDE reports. Class III milk price forecast for 2017 was increased slightly, Class IV took a dip, and the all-milk price is was reduced to $17.70 to $17.90 for 2017. Fortunately, feed should stay at profitable levels as USDA’s crop production report shows corn production up 32 million bushels and soybean production is projected at a record 4,431 million bushels.
Milk production for the remainder of 2017 is forecasted to be a little higher than last month. USDA says increases in milk per cow more than offset the slowed pace of expansion. Fat basis exports were lowered from the previous month while imports increased on purchases of butterfat. The export forecast for 2017 on a skim-solid basis is lowered on weaker skim milk powder sales.
Butter, NDM and whey prices were also forecasted lower for 2017 while cheese prices are forecasted to improve from the previous month. As a result, the 2017 Class II price is raised on higher cheese prices and Class IV price forecasts are reduced on lower butter and NDM sales. The all milk price is reduced to $17.70 to $17.90.
Fortunately for dairy producers, USDA also predicts feed costs to decrease in the near term. The September Crop Production report shows corn production to increase 32 million bushels compared to last month’s forecast. The report also shows a record soybean crop this year. Combined with substantial carryout in corn, price forecasts are reduced to a range of $2.80 to $3.60 per bushel. The increase in soybean supplies because of anticipated bin buster yields are only partially offset by a lower starting carryout. On Tuesday USDA forecasted lower soybean meal prices at $290 to $330 per short ton.