U.S. Milk Production Fluctuates
Published: Friday, October 18, 2024
The following is from Lee Mielke, author of a dairy market column known as "Mielke Market Weekly."
August milk production was off just .1% from a year ago, but milk components were up again and the August Dairy Products report shows the results.
Total cheese production climbed to 1.198 billion pounds, up .5% from July and up 1.7% from August 2023. Year to date output hit 9.5 billion, up .6% from 2023.
Wisconsin produced 294.4 million pounds, down 1.5% from July, and .9% below a year ago. California output jumped to 211.1 million pounds, up 3.3% from July, and 1.8% above a year ago.
Italian cheese output totaled 499.1 million pounds, up .6% from July and 3.1% above a year ago. Year to date, production totaled 4 billion pounds, up 3.3%.
American output inched up to 477.8 million pounds, up 1.8% from July, but .3% below a year ago. YTD, at 3.8 billion pounds, was down 4% from 2023.
Mozzarella, at 399.7 million pounds, was up 4.7% from a year ago, with YTD output at 3.2 billion pounds, up 4.4%.
Cheddar output jumped to 322 million pounds, up 10.4 million, or 3.3%, from July's output which was revised 2.7 million pounds lower, but was down 3.4 million pounds, or 1%, from a year ago. YTD Cheddar stood at 2.6 billion pounds, down 7% from a year ago.
Butter production slipped to 159 million pounds, down 5 million pounds, or 3%, from July output, which was revised up 2.3 million pounds, but was up an impressive 20.1 million pounds, or 14.5%, from a year ago. YTD butter was at 1.5 billion pounds, up 5.3% from 2023.
Yogurt production totaled 423.3 million pounds, up 7.7% from a year ago, with YTD output at 3.3 billion, up 4.5%.
Hard ice cream, at 69.3 million pounds, was up 5.9% from 2023. YTD, 504.9 million pounds had been produced, up 2.6% from a year ago.
Dry whey output slipped to 65.5 million pounds, down 2.2 million pounds, or 3.2%, from July, and was down 18.1 million, or 21.6%, from a year ago. YTD whey was at 593.8 million pounds, down 7.7%.
Whey stocks fell to 59.2 million pounds, down 4.5 million, or 7.2%, from July, and down 28.6 million pounds, or 32.6%, from a year ago.
Nonfat dry milk output fell to 114.6 million pounds, down 6.4 million, or 5.3%, from July, but was up 2.5 million pounds, or 2.2%, from a year ago. YTD NFDM was at 1.2 billion pounds, down 14.6%.
Stocks fell to 260.7 million pounds, down 9.1 million, or 3.4%, from July, and were down 1 million pounds, or .4%, from 2023.
Skim milk powder production slipped to 50.3 million pounds, down 1.3 million pounds, or 2.4%, from July, and down 21 million, or 29.4%, from a year ago. YTD SMP was at 361.5 million pounds, down 17.5% from 2023.
Much of the whey stream was again directed to whey protein concentrates (WPC) and isolates (WPI), leaving less for dryers, according to the Daily Dairy Report. "Production of WPC with 50% to 89.9% protein topped August 2023 volumes by 4.4%, while WPI output leapt 35.1% above year-ago levels."
The Agriculture Department again lowered its 2024 and 2025 milk production forecasts in its latest World Agriculture Supply and Demand Estimates report issued last Friday morning, citing slightly less growth in milk per cow.
2024 production and marketings were projected at 225.8 and 224.8 billion pounds, respectively, down 100 million pounds on both from last month's estimate. If realized, both would be down 600 million pounds, or .03%, from 2023.
2025 production and marketings were projected at 227.7 and 226.7 billion pounds, respectively, down 200 million pounds on both. If realized, both would be up 1.9 billion pounds, or .8%, from 2024.
Class III milk price forecasts were lowered for both 2024 and 2025, as expected price declines in cheese more than offset higher whey prices. The Class IV price forecasts were also lowered for 2024 and 2025, with expected lower butter prices partially offset by higher nonfat dry milk prices. I'll have more details next week.
CME Cheddar block cheese closed last Friday at $1.8875 per pound, lowest since Aug. 5, down 6 cents on the week, down 42.75 cents from its Sept. 11 peak, but was still 18.75 cents above that week a year ago.
The Cheddar barrels fell to $1.8650 last Thursday, lowest since July 12, then rallied to a Friday finish matching the blocks at $1.8875, 6.75 cents lower on the week, down 73.50 cents from their Sept. 18 peak, but 24.25 cents above a year ago. Sales totaled 19 CME loads of block on the week and six of barrel.
Midwest cheesemakers had varying demand reports. Some are steadily moving loads, particularly pizza cheese, Cheddar, and hard Italian. Makers of other types say their customers have quieted seasonally. Barrel processors say any extra loads available in recent weeks have been spoken for. Barrels are far from loose in the Midwest, says DMN, despite the bearish prices. Milk availability also remains somewhat snug, with mid-week prices remaining at or near previous levels, 50 cents to $2-over Class III. Plant downtime, which has been a regular occurrence for much of the summer, was still being reported but more plants are running regular to active schedules, according to DMN.
Class III milk demand from Western from cheese manufacturers is steady. Bottling demand is seasonally higher but cheesemakers have the milk they need. Cheese production is strong to steady with some plants running close to full capacity. Demand varies from steady to lighter. Some sellers convey that buyers have become more hesitant due to the bearish prices the last few weeks.
It's really a mixed bag for cheese, even as the milk supply remains suspect, especially in California, the No. 2 cheese producer, where bird flu is increasing. Holiday demand for Cheddar is ramping up, New Year's parties and football playoffs follow, but increased cheese processing capacity means more supply ahead. Export demand will depend on how competitive U.S. prices are.
Butter gained 2.50 cents last Monday but headed lower from there, closing last Friday at $2.6250 per pound, losing 6.25 cents on the week, 57.25 cents below its Aug. 27 peak, and 73.50 cents below a year ago. Sales totaled 90 loads on the week, six last Monday and Tuesday, 22 last Wednesday, 30 last Thursday and 26 Friday.
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