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USDA sees continued strength in cheese and steady milk prices in 2020

The USDA has raised its milk production forecast for this year and next because of stronger expected milk per cow offsetting the slow expansion in the dairy herd.

In its November supply and demand report, USDA forecast 2019 and 2020 cheese and nonfat dry milk prices higher but butter and whey lower because of continued price weakness.  The 2019 Class III and IV prices were raised on higher cheese prices more than offsetting lower whey prices.  USDA says the lower butter price in 2020 outweighs higher nonfat dry milk prices and reduced the 2020 Class IV price. 

The 2019 all milk price was raised twenty cents to $18.60 and the 2020 price was left unchanged at $18.85 per hundredweight.  

Exports on a fat basis for 2020 were lowered because higher U.S. cheese prices are expected to affect its competitiveness globally.  The skim-solids basis export forecast for 2019 was raised because of stronger sales of skim and nonfat dry milk.  The 2020 skim-solids basis export forecast was left unchanged because weak cheese and whey exports are expected to offset higher skim and nonfat dry milk sales.