In its July WASDE report, the USDA milk production forecast for 2022 was lowered by 0.1% points from the previous month, reflecting lower average growth in milk per cow. Milk output is now expected to be down 0.1% YOY at 102.5bn kgs in 2022 after a 1.3% YOY lift in 2021. Milk production for 2023 is forecast 1% above 2022 but assumed average yields per cow are also lower from the June report.

Butter 2022 forecast prices were raised from the previous month on strong demand, but the cheese price was lowered while dry whey and NFDM were unchanged. As a result, the Class IV price was raised for the current calendar year while Class III was lowered. The 2022 all-milk price forecast was marginally lower from the prior month to US$0.515/l, up from US$0.368/l in 2021 and US$0.361/l in 2020. The 2023 all-milk price is expected to decline 7.6% YOY to US$0.475/l.