Although the increase in US milk production has been slightly lowered for 2017, production for 2018 is forecast higher, based on stronger milk prices and moderate feed prices.

The all milk price, which is comparable to Ireland’s creamery average milk price, is forecast at $17.55 to $18.55/ 100 pounds (35.20c/l to 37.21c/l) for 2018, according to the latest World Agricultural Supply and Demand Estimates (WASDE) report by the US Department of Agriculture (USDA).

The lower production estimates for 2017 are attributed to slower growth in milk per cow.

Exports of dairy ingredients are forecast higher because of stronger global demand in 2018.

Butter imports are forecast modestly higher in 2018, with skim-based imports forecast lower relative to 2017.

Imports of fat-based products have been lowered from the previous estimate, but skim milk products have been increased.

Price outlook

Meanwhile, prices for cheese and non-fat dry milk are forecast higher than 2017, but butter and whey prices are forecast lower.

Class III prices (milk for cheese) are increased based on the cheese price increase more than offsetting the fall in whey prices.

Class IV prices (milk for butter and skim) increases are based on higher non-fat dry milk prices compensating for the lower butter prices.

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