Annual product price forecasts for cheese, butter, non-fat dry milk, and whey were raised from the previous month on current prices in the monthly WASDE report, while there is lower expected milk production, and tightening stocks. The higher product prices are expected to flow into milk prices according to milk order formulae, with both Class III and Class IV prices higher and the 2022 all milk price forecast increased to $23.55/cwt, $0.95/cwt up from the previous month and an 8-year high if it happens.
USDA’s 2022 milk production projection was reduced by half a billion pounds, or 0.2%, from the previous month on lower projected dairy cow numbers. 2022 projected milk production volumes were 0.4% up on 2021 however, which would be the smallest growth of the past three years and the second smallest percentage gain in the last 13 years. Net dairy trade is expected to be 14.3% of US milk solids production, not quite to the record 2020 level of 14.4%, continuing the steadily improving portion seeking markets outside the US.