USA – A report by the U.S. Department of Agriculture (USDA) in its World Agricultural Supply and Demand Estimates (WASDE) has indicated a revised outlook for the U.S. dairy industry, due to a decline in milk cow inventories and a slower growth rate in milk output per cow.
The report reveals growing pressures on dairy operations, which could result in potential supply shortages in the coming years.
The USDA’s upcoming Cattle report is anticipated to provide critical insights into whether efforts to retain dairy heifers can help rebuild the milking herd, which will be vital in determining long-term production trends.
Industry experts are closely monitoring these developments as they are expected to have a direct impact on milk supply and dairy pricing strategies.
According to the WASDE report, U.S. imports for 2024 have been adjusted upward due to a rise in cheese and butter imports, particularly on a fat-basis
However, imports of skim-solids have remained steady. Looking ahead to 2025, fat-basis imports are projected to rise further, bolstered by continued strong demand for cheese and butter.
In contrast, imports of skim-solids are predicted to decline, reflecting a reduction in the import of casein and milk protein concentrates.
Meanwhile, U.S. dairy exports have exhibited mixed trends. Exports of butter and cheese are on the rise, supported by competitive pricing, prompting upward revisions in fat-basis export forecasts for both 2024 and 2025.
However, the outlook for exports of skim-solids is less favorable. Nonfat dry milk (NDM) and whey are facing stiff competition in international markets, which has led to downward adjustments in export expectations for these products.
Price forecasts for dairy producers present a mixed picture. The all-milk price for 2024 has been adjusted downward to US$22.60 per hundredweight (cwt), reflecting current market conditions.
However, the outlook for 2025 is more optimistic, with the all-milk price expected to rise to US$23.05 per cwt.
The anticipated increase is attributed to higher prices for key dairy commodities such as cheese, butter, NDM, and whey, which are supported by tighter milk supplies and strong demand.
The price forecasts for Class III and Class IV milk are also expected to rise in 2025, driven by higher prices for cheese, whey, butter, and NDM.
These price movements present both challenges and opportunities for dairy producers as they prepare for the coming years.
The latest revisions to milk production and trade forecasts highlights the evolving dynamics in the global dairy market.
Lower cow inventories and slower milk growth per cow indicate that producers will need to make strategic adjustments to remain competitive.
Shifting global trade patterns are also expected to play a significant role in the future of U.S. dairy exports.
As USDA reports continue to unfold, stakeholders across the dairy supply chain will closely monitor these developments to navigate the changing landscape
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