The USDA has reduced its milk production forecast for this
year and next because of slower expected milk per cow and a smaller herd.
In its August supply and demand report, USDA forecast 2019
cheese, butter, and whey prices higher while nonfat dry milk prices were
lowered because of slowing demand. Whey
prices were unchanged for 2020 while cheese, butter, and nonfat dry milk were
lowered.
The 2019 Class III price was raised on higher cheese and
whey prices. The Class IV price was lowered as lower nonfat dry milk prices
more than offset higher butter prices.
The 2020 Class III and IV prices were lowered on weaker product prices.
The 2019 all milk price increased a dime to $18.30 but was
lowered a nickel to $18.80 for 2020.
Exports on a skim-solids basis exports were lowered because
of expected reduced sales of nonfat dry milk; fat basis exports were also
reduced. Slowing sales of butterfat
reduced the 2020 fat basis exports.
Skim-solids basis exports were also lowered because of weak demand for
nonfat dry milk and increasing global competition.