In its latest world agricultural supply and demand estimate (WASDE) report, the USDA has raised its national milk production forecast for 2017 by 136m litres to 95.7bn litres.
Much of the increase is expected from higher cow numbers later in 2017. Milk output per cow is also expected to increase as better-quality rations can be fed.
Stocks of both fat and SMP have been raised for the end of 2017. Fat-based imports have been lowered as domestic butterfat is expected to be more competitive with EU imports. Fat-based exports are unchanged while skim milk products are raised slightly.
Cheese and butter price forecasts are lowered as a result of higher stocks.
Class III (milk for cheese production) prices are raised as higher whey prices more than offset the lower cheese price forecast but Class IV (milk for butter and SMP manufacture) is reduced in line with the lower butter price forecast.
The all milk price is forecast higher at $17.70-$18.40/100 pounds (36.68-38.13c/l in euro terms).
Dairy trends: dairy markets returning to net-demand position