Monthly Forecast Update – July 2022
Forecast updates:
- There are no significant forecast updates in 2022, excluding spot market modifications.
- Most of the adjustments were in 2023 – increasing some price expectations.
- Increased prices from Europe vs. previous forecasts.
- Lackluster milk production continues to thwart recovery efforts. As a result, some products could be modestly higher, but still lower than this year. Further, efforts to conform to new environmental regulations could cause further declines in the milking herd.
- We have increased some New Zealand prices for the remainder of 2022 due to improving off-season prices.
- While prices could be modestly better than previous forecasts, concerns over consumer demand in early 2023 suggest that prices may be above the five-year average but well below current levels.
- Increased prices from Europe vs. previous forecasts.
- Increased Q3 butter prices due to solid cream demand and production that remains modestly behind last year.
- Increased August forecast to average above $3/lb.
- While that doesn’t mean that prices will remain above $3 the entire month, given the recent stint above $2.90s, it could suggest some runs above $3 that cause prices to stay unusually high.
- Expect Class I prices have peaked, and that price could ease into the end of this year with more significant declines forecast from Q1 2023 forward.
- Forecasting NDM prices to remain in the low 180s through the fall, with prices expected to decline in the winter on slack overseas demand. That is the most significant deviation to futures forecasts.
- Most of the adjustments were in 2023 – increasing some price expectations.