A32-Lancaster Farming, Saturday, September 23, 2000
Weekly Dairy Market Outlook
U S milk production will actually
decline from 167 7 billion pounds
in 2000 to 167 5 m 2001 (see
Table 3) They are forecasting an
average Class 111 price in 2001 of
$ll 10 per cwt, an increase of
$0 95 per cwt from 2000. The
mean Class IV price forecast for
2001, however, is expected to
decline $0 30 per cwt to $ll 40
They are forecasting the U S
average all-milk price will
increase $0 25 per cwt to $l2 70
in 2001.
I find it hard to believe that the
milk supply will actually decline
in 2001 relative to this year My
guess is that a 1-2 percent rate of
growth in the milk supply for
2001 is possible Ido agree that
the Class 111 price will increase in
2001 relative to this year, but an
increase of $0 95 per cwt is a bit
high Here are my thoughts.
Let’s start with my estimate of
$lO 07 per cwt for the Class 111
price in 2000 That is a very
MILK. IT DOES A BODY GOOD.
conservative estimate lam going
to assume that USDA will modify
the formula for the Class 111 price
(adjust the make allowance for
protein) by early next year
That could add another $0 20-
$0.50 per cwt And, a reduction
m the rate of growth in the milk
supply coupled with a moderately
strong economy could add an
additional $0 20-$0 30 per cwt to
the Class 111 price. Add that all
up and my estimate is the Class
111 price will be $10.47-$10.87
per cwt That will average $lO 67
per cwt for 2001, up $0.60 per
cwt from the year before
USDA’s forecast for a lower
Class IV price for 2001 looks
reasonable since a tilt in the
butter/powder support prices
sometime next year looks
inevitable.
You can find other useful
information about the dairy
industry on my website at
http://www.aers.psu.edu/dairyoutl
ook/
Wheat
Table 2. NASS Weekly US Average Survey Prices
Cheese:
500 lb Barrels 1/ 1.1551 1.1106
40-lb. blocks 12609 1.2310
Butter 1 1510 1.1772
Nonfat dry milk 1.0209 1.0176
Dry whey 0 1837 0.1855
Source: Dairy Product Prices, NASS, USDA
(http://usda. mannlib. Cornell, edu/reports/nassr/price/dairy/1999/).
1/ Adjusted to 39% moisture.
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