Cheese Utilization Hits All-Time High of 1.2B Pounds
Published: Friday, June 27, 2025
The following is from Lee Mielke, author of a dairy market column known as "Mielke Market Weekly."
The USDA's latest Dairy Supply and Utilization report had good news for the dairy industry. April cheese utilization hit 1.2 billion pounds, up 1.5% from April 2024, an all-time high on a 30-day adjusted basis, says HighGround Dairy.
Speaking in the June 23 Dairy Radio Now broadcast, HighGround's Curtis Bosma said it was a good thing that demand was so strong because April cheese production was the highest as well. Domestic demand was up 1% and characteristically makes up 90% of the usage, but exports were up a strong 6.8%, totaling 108.9 million pounds.
Butter disappearance, at 209.9 million pounds, was up 24.4%, a record high for the month of April as "the Easter holiday drove domestic consumption up 36.3 million pounds, up 22.3%, compared to a year ago. Exports remain elevated due to the substantially discounted U.S. prices compared to the rest of the world. They were down from the high observed in March but still up 87.5% from a year ago.
Nonfat and skim milk powder use totaled 189.3 million pounds, down 2.7%, but that was the smallest year-over-year loss since January 2023, according to HGD. "Greater domestic utilization helped to partially offset the decline in exports," said HGD, "which marked the lowest April since 2016."
Dry whey utilization, at 70.7 million pounds, was down 21.4% from a strong 2024. Exports were down 2.9%. "Increased trade tensions with China resulted in a barrage of new tariffs on U.S. goods," explains HGD. "Although China and the U.S. announced a trade truce in June, lowering tariffs, the back and forth in April saw less whey move to China, the top destination, and thus reduced exports overall."
The USDA's latest Livestock Slaughter report showed an estimated 196,700 dairy cows were slaughtered under federal inspection in May, down 10,500 head from April, and 19,300 head, or 8.9%, below May 2024. Total to date, 1.1 million head had been culled, down 181,700, or 15.1%, from 2024.
The Agriculture Department's latest Livestock, Dairy and Poultry Outlook, issued June 18, mirrored milk price and production projections in the June 12 World Agricultural Supply and Demand Estimates report. The outlook stated, "With favorable farm margins and low dairy cow slaughter rates, the national dairy herd continued to expand in April despite tight numbers of replacement heifers and lingering highly pathogenic avian influenza (HPAI) concerns."
April was the seventh consecutive month of year-over-year growth in dairy livestock inventory. The recent Milk Production report showed the average number of cows in April was 9.425 million, up 89,000 from a year ago, and 5,000 more than March. The milk-per-cow estimate was 2,055 pounds, up .5% from April 2024. Driven by both a higher number of cows and higher productivity, April milk output was estimated at 19.37 billion pounds, up 1.5% from a year ago.
The year-over-year increase in the numbers of dairy cows and milk per cow was unevenly distributed among the top 24 states, according to the outlook. "Texas, Idaho, Kansas and South Dakota led the expansion by adding a total of 110,000 head. Additional milk processing capacity has been added and/or is expected to come online in some of these states. Milk per cow per day increased across most of the 24 states. Exceptions included Iowa, Oregon, Washington and California. California registered the largest decline on a percentage basis. California is the state with the highest number of dairy herds impacted by HPAI from September through December 2024. Since then, the monthly number of reported outbreaks has declined significantly both in California and elsewhere. However, as of June 16, the majority of 2025 outbreaks (139 out of 156 nationwide) were in California and Idaho," according to the outlook.
Cheese prices plunged in the Juneteenth-holiday-shortened week. The markets were closed last Thursday. Block Cheddar closed last Friday at $1.6650 per pound, as traders anticipated the afternoon's May Milk Production report. The blocks were down 17.25 cents on the week, lowest since April 4, and 18 cents below a year ago. The barrels finished at $1.6575, 17.75 cents lower, lowest since March 31, and 26.25 cents below a year ago. Sales totaled 36 lots of block and six of barrel.
StoneX warned, "U.S. domestic Cheddar consumption, our largest cheese market, has been the worry this month on top of waning export demand. Nonetheless as U.S. cheese markets have been weaker, EU Mozzarella prices are only down 3-5 cents this month to about $2.25 per pound. So the gap between these two markets are widening again with a U.S. dollar that is still weak, we can't discount another wave of export demand in the short term that could tighten spot supplies."
Warmer weather is contributing to lighter milk output in much of the Central region, according to Dairy Market News, but cheesemakers say unplanned downtime at some plants left plenty of milk available. Spot loads traded $7-under to flat last week. Cheese production remains strong in the region, though the plant down time contributed to lighter output overall. Domestically produced cheese is priced competitively in international markets and contributing to strong exports. Domestic demand is mixed. Retail demand is steady, but food service sales are declining, says DMN, and more cheese made its way to the CME.
Class III milk demand from Western cheese manufacturers is strong, says DMN. Availability varies. Cheese output is steady and some inventories are extremely tight, but are available. Domestic demand is steady. Export demand is stronger.
Butter hit $2.5925 per pound last Monday, highest since Jan. 13, but closed last Friday at $2.50, down 7 cents on the week and 59 cents below a year ago. There were 31 sales on the week, down from 135 the previous week.
Cream output is declining in the Central region as warmer temperatures negatively impact milk components. Components are down week-to-week but fat content is up from a year ago, leaving plenty of cream available. Ice cream makers continue to pull on cream supplies, and butter makers are actively churning as they work to stock butter for use later in the year. Domestic butter demand is steady to lighter. High prices for butter produced internationally are contributing to strong exports. Some plants are increasing their 82% butterfat product to meet this export demand and reducing 80% output, says DMN.
Grade A nonfat dry milk made it back to $1.28 per pound last Wednesday but closed last Friday at $1.26, down .75 cents on the week, while 5.50 cents above a year ago. There were seven sales on the week.
Dry whey closed the week at 57 cents per pound, 1.75 cents higher, and 10 cents above a year ago, with 10 CME sales for the short week.
StoneX predicts May milk production will be up 1.7% from last year and possibly stronger. "Production continues to improve in California. It doesn't seem like there is any shortage of milk in other parts of the country, and we are going to be lapping over weak production last year as the first wave of bird flu was depressing production." Additionally, "Fat and protein in the milk pooled in May was up from last year, but the gains in fat were a little slower than recent months," said StoneX. I'll have complete details next week.
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