Solid Demand Outlook for U.S. Dairy

WASHINGTON - Oct 12/06 - SNS -- Milk production levels and demand are expected to remain robust through the coming year, according to the latest supply and demand forecasts from the USDA's World Agricultural Outlook Board.

Domestic milk production forecasts for 2006 and 2007 are raised from last month. Cow numbers in 2006 were reduced from last month.

In 2007, cow numbers are increased slightly from last month moderating the rate of decline. In addition, milk per cow continues to grow, supporting higher production forecasts in both 2006 and 2007.

Demand is expected to remain robust, especially for nonfat dry milk (NDM) and whey, but larger product supplies may pressure cheese and butter prices. A weaker expected 2006 cheese price results in a lower forecast 2006 Class III price, but a stronger NDM price raises the forecast for the Class IV price.

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