USDA’s latest dairy outlook reveals minimum changes in the balance sheets or this year and next, but continued growth in product and class prices in 2020.
“Pretty small changes to the milk supply and demand balance sheet this month,” said Mark Jekanowski, acting World Agricultural Outlook Board Chair. “Imports of butter will weaken a bit for the remainder of this year and into next year. On the other hand, we see some strength in exports of butter.”
When it comes to exports, there is supposed to be strength in global demand for nonfat dry milk, which will support higher class for milk prices moving into 2020.
USDA is forecasting a $1 increase in class four milk prices for 2020, and class three prices are set to rise at 15 cents per hundredweight, with lower cheese prices offsetting increased prices for butter. The end result is that all milk prices for next year are forecasted at $19.40 per hundred, up 55 cents from the previous month and 80 cents higher than 2019.