USDA Forecasts Rising Milk Output

WASHINGTON - May 12/06 - SNS -- Milk production in the United States is forecast to increase gradually in 2007 as weaker milk prices and higher feed costs lead to a reduction in dairy cow inventory, according to updated supply and demand forecasts by the USDA's World Agricultural Outlook Board.

Milk per cow is expected to continue increasing but at a slower rate than in 2006. Domestic disappearance of fat and skim solids is expected to remain relatively robust, helping draw down commercial stocks and boosting butter and cheese prices.

Although it is expected that commercial exports will help absorb much of the expected supplies of nonfat dry milk (NDM), 2007 prices are likely to be slightly weaker than in 2006 with increased sales to the CCC. Class III prices are forecast about $1.00 per cwt higher than 2006, but Class IV prices may only average about 25 cents per cwt higher. The all milk price is forecast at $12.85- $13.85 per cwt in 2007.

Forecast milk production in 2006 is lowered as projected growth in milk per cow is slightly slower than last month. However, both fat and skim- solids basis commercial use in the first quarter may be weaker than previously forecast.

Subscribers can read the full text of the article by Clicking here