The estimate for milk production for 2015 was down from 208.9bn pounds (lb) (94.95m tonnes) to 208.7bn pounds (94.86m tonnes) from the October estimates. Production estimate for 2016 was also down from 213bn pounds (96.818m tonnes) to 96.77m tonnes.

The decline from last month resulted from a faster rate of decline in the dairy herd than expected from its second-quarter peak and growth in milk per cow in 2015 is slower than anticipated.

US exports are reduced for 2015 on weaker butter, cheese and whey sales. Uncompetitive prices due to the strong dollar are likely to limit export sales.

ADVERTISEMENT

Strong domestic demand for butter is expected to support relatively high butter prices during the remainder of 2015, but supplies are expected to be high, resulting in a lower forecast price for 2016. Cheese prices are lowered for 2015 and 2016 as stocks remain high. Non-fat dry milk prices for 2015 and 2016 have been reduced as they move close to international levels. Whey prices are unchanged from last month.

The report also states that global supplies are expected to remain high, offsetting the potential impact of decreased production in 2016.