The following is a synthesis of a USDA report speculating prices for milk and dairy products in 2012.
Milk and Feed Costs
While lower than last year, feed ingredients such as corn and soybeans are priced at historically high rates. This paired with the declining price of milk will result in a milk-feed price ratio unlikely to improve in 2012.
“The total milk production forecasts for both 2011 and 2012 remain unchanged from December at 196 billion and 198.5 billion lbs., respectively”
Butterfat and Cheese Imports
In 2012, butterfat and cheese import rates will remain stable with those of last year.
In October cheese imports were “unexpectedly” high. In comparison butterfat only saw a small increase in October. Because of this growth, fat basis milk equivalent imports for last year were raised from 3.3 billion lbs. to 3.4 billion lbs. For 2012, the USDA report forecasts similar numbers in cheese and butterfat imports.
Butterfat exports were low in October and are speculated to remain low in 2012.
Fat Basis Exports and Skim Solids Basis Exports
“The fat basis export forecast for 2012 remains at 8.6 billion lbs., unchanged from December.”
For skim solids basis, higher movement in lactose, food production and infant preparations led to export projections increased by 200 million lbs. The USDA speculates that in 2012 skim solid basis exports will remain level with December at 31.9 billion lbs.
End of the year stocks for 2011 in fat and skims-solids basis were “adjusted downward slightly.” This was due to lower carryin stocks.
“Butter stocks at the end of November were above 2010 levels, but still below those of 4 out of the most recent 5 years. Stocks of all natural cheeses are above those of the most recent 5 years except for 2010. Similarly, nonfat dry milk (NDM) stocks are above those of the last 5 years except for 2008.”