In its May WASDE report, the USDA milk production forecast for 2022 was increased by 0.2% from the previous month, reflecting a larger dairy herd more than offsetting lower average milk per cow. Milk output is now expected to grow 0.2% YOY to 102.8bn kgs in 2022 after a 1.3% YOY lift in 2021. Milk production for 2023 is forecast at 1.2% above 2022 driven by gains in milk per cow, with the herd expected to average close to 2022 levels.

Cheese and butter prices for 2022 were raised from the previous month on strong demand, but NFDM and dry whey prices were lowered. As a result, the 2022 Class III price was unchanged from the prior month while the Class IV price was lowered. The 2022 all-milk price forecast was lowered marginally from the prior month to US$0.507/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 8.5% YOY to US$0.464/l.