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USDA cuts milk production forecasts

Progressive Dairyman Editor Dave Natzke Published on 11 June 2019

The dairy news was mixed to mostly better in the USDA’s monthly World Ag Supply and Demand Estimates (WASDE) report, released June 11.

Citing declining cow numbers and slowing growth in milk output per cow, the USDA cut its 2019 milk production forecast. The production outlook was also reduced for 2020, as higher anticipated feed costs are expected to weaken producer margins, limiting growth in the dairy cow herd and milk per cow next year. However, those cuts in expected production levels didn’t substantially change previous outlooks for milk prices in either year.



The 2019 milk production forecast was reduced about 500 million pounds from last month’s estimate to 218.2 billion pounds. If realized, 2019 production would be up less than 0.3% from 2018.

The projected 2019 average butter and nonfat dry milk prices were raised from a month ago, but those gains were somewhat offset by small declines in projected average cheese and dry whey prices. As a result, the 2019 all-milk price was forecast at $18 per hundredweight (cwt), down a nickel from last month, but up $1.74 per cwt from 2018 and the highest average since the record high of $23.97 per cwt set in 2014. The USDA projected the 2019 Class III milk price at $15.90 per cwt, up $1.30 per cwt from 2018. The 2019 projected Class IV price was raised to $16.40 per cwt, up $2.17 per cwt from 2018.

Looking to 2020, the USDA outlook reduced the milk production forecast to 221.9 billion pounds, down about 800 million pounds from last month’s forecast. Nonetheless, in part to an extra day to leap year, the agency forecasts 2020 milk production will jump 1.7% from 2019.

Although up just a dime from last month’s forecast, projected average 2020 milk prices continue to show improvement. Price forecasts for 2020 are: Class III – $16.65 per cwt, Class IV – $16.85 per cwt and all-milk – $18.90 per cwt.

Looking at the WASDE report’s beef and feed situation and forecast:


  • Beef cattle: The 2019 beef production forecast was reduced compared to a month ago, primarily due to lower expected steer and heifer slaughter as higher corn prices create incentives to add weight on pasture, slowing the pace of feedlot placements. The 2019 average cattle price was projected at $117 per cwt, with highest prices already behind us for the year. Weakest prices are forecast in the third quarter.

  • Corn: This month’s 2019-20 U.S. corn outlook is for increased beginning stocks and imports, sharply lower production, reduced feed and residual use and exports, and smaller ending stocks. Unprecedented planting delays observed through early June were expected to prevent some plantings and reduce yield prospects. As a result, U.S. corn production for 2019-20 was forecast to decline to 13.7 billion, the smallest harvest since 2015-16. The projected 2019-20 season-average corn price received by producers is $3.80 per bushel, up 50 cents from last month’s forecast and 20 cents higher than the 2018-19 average of $3.60 per bushel.

  • Soybeans: This month’s U.S. soybean supply and use projections for 2019-20 included higher beginning and ending stocks due to a decline in exports to China. The USDA didn’t, however, adjust acreage and production forecasts due to weather, citing several weeks remaining in the planting season. The 2019-20 soybean price received by producers was forecast at $8.25 per bushel, up 15 cents from last month and reflecting the impact of higher corn prices. Soybean meal prices are projected at $295 per ton, up $5 from last month’s forecast.

The USDA will release its Acreage report on June 28, which will provide survey-based indications of planted and harvested area.  end mark

Dave Natzke
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