United States-Dairy production.

UNITED STATES-DAIRY PRODUCTION.

Milk production forecasts for 2009 are lowered from last month. Cow numbers for 2009 are forecast lower, as producers are expected to liquidate herds in response to poor returns. The recently announced Cooperatives Working Together (CWT) herd buyout is expected to encourage a more rapid reduction in cow numbers by encouraging producers to reduce herds. Milk per cow growth is slowed from last month reflecting poor returns. Import forecasts are unchanged from last month, but commercial exports are lowered due to reduced butter exports. CCC net removals are reduced as strengthening prices through the year will result in lower sales of dairy products to the CCC.

Milk price estimates for 2009 are raised. Forecasts for all dairy products are up from last month. Reductions in milk supplies are expected to support product prices. As a result of higher product prices, the Class III and Class IV price forecasts are raised from last month. The all milk price is also forecast higher this month at $11.85 to $12.35 per cwt