2024 Milk Production Forecast Reduced, All-Milk Price Looks More Encouraging

 Down 1 million lbs. from January’s estimate, the milk production forecast for 2024 now sits at 228.2 billion lbs. Compared to last year, 2024’s forecast stands higher than the 226.6 billion lbs. estimate in February 2023.

Butter price forecasts for 2024 saw positive movement in February, jumping 10.5 cents to $2.77 per lb. On a fat basis, domestic use was raised as a more rapid pace of disappearance occurred during the fourth quarter of 2023 and carried over into 2024.

Fat basis exports also saw growth based on higher expected butter and cheese exports. Currently, the U.S. is expected to be competitive in the international market for butter and cheese.

The skim-solids basis domestic use was raised based on higher-than-expected disappearance in the fourth-quarter of 2023. Meanwhile, skim-solids exports were lowered to reflect the strength of domestic prices as domestic demand is stronger.

Cheese, butter, nonfat dry milk (NDM) and whey prices for 2024 were all raised based on recent price strength, tighter supplies of milk, and stronger domestic use. Class III and Class IV prices in 2024 jumped higher based off of higher product prices.

The Class III price forecast made a significant jump to $17.10 per cwt, up $1 from last month’s forecast. Class IV price predictions also saw improvement, moving 85 cents to $20.20 per cwt.

For 2023, the all-milk price estimate was reduced to $20.48 per cwt. based on reported data through December. Currently, the all-milk price forecast for 2024 now stands at $20.95 per cwt., up 95 cents from last month’s forecast.