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DBweekly CROP PRODUCTION, WORLD AG SUPPLY & DEMAND ESTIMATE REPORTS RELEASED ECONOMIC OUTLOOK MOSTLY GOOD By Lee Mielke & Dave Natzke USDA statisticians and market reporters are back in full swing now that the shutdown and some sequestration budget constraints are off. USDA released both monthly Crop Production and World Ag Supply & Demand Estimates (WASDE) reports on Nov. 8. Both offer largely positive news for dairy producers. First, the Crop Production report. Corn Dairy price forecasts Estimated Forecast Product 2012 2013 2014 Class III ($/cwt) 17.44 17.90-18.00 16.85-17.75 Class IV ($/cwt) 16.01 18.80-19.00 18.60-19.60 All milk ($/cwt) 18.53 19.80-19.90 19.30-20.20 Cheese ($/lb.) 1.7076 1.765-1.775 1.670-1.760 Butter ($/lb.) 1.5943 1.515-1.545 1.465-1.585 NFDM ($/lb.) 1.3279 1.685-1.705 1.685-1.755 Dry whey (¢/lb.) 59.35 58.0-59.0 0.545-0.575 Feed price* outlook Estimated Forecast Product 2011/12 2012/13 2013/14 Corn ($/bu.) 6.22 6.89 4.10-4.90 Soybeans ($/bu.) 12.50 14.40 11.15-13.15 Soy meal ($/ton) 394 468 375-415 *U.S. average price paid at the farm level Source: USDA World Ag Supply & Demand Estimates report, Nov. 8, 2013 production is forecast at 14.0 billion bushels, up 1% from the previous forecast and up 30% from 2012. If realized, this will be a new record-high. Based on conditions as of Nov. 1, yields are expected to average 160.4 bushels per acre, the highest average yield since 2009. Area harvested is forecast at 87.2 million acres, down 2% from the previous forecast. Soybean production is forecast at 3.26 billion bushels, up 3% from the previous forecast and up 7% from last year. If realized, production will be the third largest on record. Yields are expected to average 43.0 bushels per acre, up 1.8 bushels from the previous forecast. Area for harvest in is forecast at 75.7 million acres, down 1% from both the previous forecast and last year. On to the WASDE. With more corn production, the projected season-average farm price (see table) was lowered 30¢ at both ends of the range compared to the previous forecast. The season- average soybean price for 2013/14 was projected down 35¢ on both ends. However, the soybean meal price is projected up $15 on both ends. Affecting cottonseed prices, USDA raised the cotton harvest forecast to 4.357 million tons, up 66,000 tons from the previous forecast. It’s still 1.3 million tons less than 2012. Dairy numbers USDA reduced projected 2013 milk production estimates from a month earlier, reflecting slower growth in third-quarter production, but 2014 production estimates were raised as producers are expected to increase cow numbers in response to improving returns, plus more milk per cow. • 2013 production and marketings were projected at 201.7 billion lbs. and 200.7 billion lbs., respectively. Each are down 100 million lbs. from last month’s projections. If realized, 2013 production and marketings would be up 0.7% from 2012. • 2014 production and marketings were projected at 204.9 billion lbs. and 203.9 billion lbs., respectively. If realized, 2014 production and marketings would be up about 1.6% from 2013. 4 Dave Natzke | DairyBusiness Update firstname.lastname@example.org Product price forecasts for cheese, butter, and nonfat dry milk (NDF) were forecast higher (see table), on strong domestic and international demand. The whey price forecast was lower, reflecting current prices. Higher dairy production is expected to pressure 2014 cheese, butter, and whey prices but expected strength in exports supports a higher NDM price forecast. Pressured by lower whey prices, the Class III milk price is reduced for 2013 and 2014. The Class IV price forecast is raised for 2013 and 2014, largely on higher NDM prices although higher butter prices in 2013 also provide support for the higher forecast. Beef For 2013, the beef production estimate is nearly unchanged, with a lower third-quarter estimate largely offset by higher expected fourth-quarter production. Cattle prices for 2013 and 2014 were raised. The 2013 steer price was estimated in at $125.69/cwt.; the 2014 forecast is in a range of $126-$137/cwt., up $1 on the top end.