U.S. milk production inches higher while field work remains exuberant

U.S. milk production is hesitating but inching higher. The Agriculture Department's latest preliminary data shows April output at 19.2 billion pounds, up just 63 million pounds or 0.3% above April 2022. The 24-State total, at 18.4 billion pounds, was up 0.5% from a year ago. The March 50-State and 24-State totals were revised up 16 million pounds.

Cow numbers totaled 9.43 million, down 16,000 head from the March count which was revised up 11,000. The herd was up 23,000 from January and up 26,000 from a year ago. The 24-State count was down 15,000 from the March number, which was revised 7,000 lower, and 36,000 head above a year ago.

Output per cow averaged 2,037 pounds, up 1 pound or 0.05% from April 2022 in the 50 states and up 2 pounds to 2,055 pounds in the top 24 states.

HighGround Dairy (HGD) points out "A big driver of the lower milk per cow nationally is smaller yields in California which makes up around 18% of total U.S. milk output. March and April 2023 had dismal milk per cow numbers, down 2.1% and 1.9% year over year, respectively." StoneX adds however; "As new crop hay becomes available and farm level feed costs shift lower we should see improved output per cow as we move through the year."

California output remained below a year ago, still recovering from weather in March. Output dropped to 3.5 billion pounds, down 69 million or 1.9% from a year ago, as output per cow was down 40 pounds. Cow numbers were unchanged.

Wisconsin output totaled 2.6 billion pounds, up 3 million pounds or 0.1% from a year ago, thanks to a 10 pound gain per cow offsetting the loss of 5,000 cows.

Texas was up 1.3%, thanks to a 10 pound gain per cow. Cow numbers were up 5,000 from a year ago but were 15,000 lower than in March due to that fire.

Idaho was up 2.7% on 16,000 more cows and a 5 pound gain per cow. Michigan was up 2.6%, on a 15 pound gain per cow and 8,000 more cows. Minnesota was up 1.5% on a 25 pound gain per cow and 1,000 more cows. New Mexico was down 3.1%, on 10,000 fewer cows. Output per cow was up 10 pounds. New York was up 2.4% on 10,000 more cows and 15 pounds more per cow. Oregon was down 1.3%, on a loss of 2,000 cows. Output per cow was up 5 pounds. Pennsylvania was unchanged. Cow numbers were down 1,000 but output per cow was up 5 pounds. South Dakota was up 7.7%, thanks to 13,000 more cows and a 5 pound gain per cow. Vermont was unchanged across the board. Washington State was up 0.8%, thanks to a 30 pound gain per cow offsetting the loss of 2,000 cows.

Components in the milk were up from last year, according to StoneX, "So component-adjusted production was up 1.1%. While there may be some signs of stress on U.S. dairy farms, those revealed in this report are largely a result of problematic weather and a horrific fire, not necessarily financial. That will likely change this month and potentially result in more widespread contraction heading into the second half of 2023."

Dairy cow culling remains above a year ago. The latest Livestock Slaughter report shows an estimated 243,600 head sent to slaughter under federal inspection in April, down 62,600 head from March, but 5,800 or 2.4% above April 2022. Culling in the four month period totaled 1.114 million, up 51,800 head or 4.9% from the same period a year ago.

The week ending May 13 saw 56,000 dairy cows go to slaughter, down 1,100 from the previous week but 1,700 head or 3.1% more than a year ago. Year to date, 1.226 million head have been culled, up 53,000 or 4.5% from a year ago.

Meanwhile, butter stocks are building. The latest Cold Storage report shows the April 30 inventory at 327.7 million pounds, up 18.2 million pounds or 5.9% from the March level, which was revised up 16.8 million pounds, and up 29.3 million pounds or 9.8% from April 2022, fifth consecutive month to top a year ago.

HGD points out "When USDA originally released March Cold Storage figures last month, it showed butter stocks falling from February to March an infrequent occurrence. However, revised numbers were issued in this month's report, and USDA revised March butter inventories up to 309 million pounds, a 5.3% rise from February, and a 9.4% jump versus March 2022."

American cheese stocks climbed to 838.2 million pounds in April, up 11.4 million pounds or 1.4% from the March level which was revised up 5.5 million pounds. They were also 2.5 million pounds or 0.3% above a year ago.

The "other" cheese inventory fell to 603.7 million pounds, down 8.3 million pounds or 1.4% from the March level which was revised up 6.3 million pounds, and was down 17.5 million pounds or 2.8% from a year ago.

Cheese stocks totaled 1.463 billion pounds, up 3.1 million pounds or 0.2% from March, but 17.4 million or 1.2% below a year ago, third month in a row to be below a year ago.

Field work remains exuberant. U.S. corn planting was at 81%, as of the week ending May 21, according to the USDA's latest Crop Progress report. That's up from 65% the previous week, 12% ahead of a year ago, and 6% ahead of the five year average. 52% was emerged, up from 30% the previous week, 17% ahead of the previous year, and 7% ahead of the five year average.reduced production, food, seed, and industrial use (FSI), feed and residual use, exports, and ending stocks. Corn production was estimated at 13.73 billion bushels, down 200 million as an increase in yield was more than offset by a 1.6 million acre cut to harvested area.

Soybeans were 66% planted, up from 49% the week before, 19% ahead of a year ago, and 14% ahead of the five year average. 36% are emerged, 17% ahead of a year ago, and 12% ahead of the five year average.

Dairy markets weren't giving much hope going into the Memorial Day weekend especially on the whey side of the equation. The whey price fell to 25.50 cents per pound Monday, lowest price ever since it started CME trading on Mar. 12, 2018 at 26 cents per pound. It climbed back to 27.75 cents Wednesday but closed Friday at 27.50 cents per pound, up a penny on the week but 24.75 cents below a year ago. 36 loads sold on the week, down from 75 the previous week.

The Daily Dairy Report's Sarina Sharp wrote in the May 19 Milk Producers Council newsletter; "Whey has not spent much time below 30 cents without extreme events to explain the depression. In 2019, African swine fever devastated China's hog herd and throttled Chinese imports of feed-grade whey. U.S. whey was further disadvantaged by the U.S.-China trade war, which levied punitive tariffs on U.S. whey products. Spot whey also dipped below 30 cents in 2020, when the pandemic closed nearly every gym in the nation and demand for protein drinks plummeted. Today, the cause is much less dramatic. Processors are simply making more whey powder than the market needs," Sharp stated.

Cheddar block cheese closed Friday at $1.4775 per pound, down 5.75 cents on the week and 81.75 cents below a year ago.

The barrels finished at $1.49, up 2 cents, 80.50 cents below a year ago, and an inverted 1.25 cents above the blocks. There were 22 sales of block on the week at the CME and 29 of barrel.

A large solicitation by the USDA for cheese was announced this week. StoneX stated "While price supports have been relatively non-existent for some time, we are familiar with government buying food products since the Food Box programs during COVID. Volume solicited is not at that level, but it is rather large. The solicitation asked for 47.6 million pounds of cheese," StoneX stated but "It is unknown at this time if it will all be awarded and what the timeframe is."

Dairy Market News reports that milk remains available for Midwest cheese processors, which is typical ahead of a holiday weekend however, for the first time this year, sentiment is changing in regards to milk availability moving into the near-term. Components have started to seasonally shift lower. Spot milk prices ranged from $11 to $4 under Class.

Retail and food service cheese demand in the West is holding steady. Tight block inventories were reported from a few manufacturers with production moderately ahead of contracted retail and food service commitments. Contracted obligations are anticipated to put heavier draws on block inventories for the remainder of May. Some contacts relay good export demand from Asia, Mexico, and South America, while others say demand is lighter, says DMN.

Cash butter fell to $2.4175 per pound Thursday but finished Friday at $2.43, down 3 cents on the week and 44.75 cents below a year ago, with 3 loads sold.

Butter plants reported widely available cream again this week though ice cream producers are expected to increase production. Cream is not expected to remain as wide open as it has been and "this may be the final churning push ahead of the late summer-fall demand upsurge," says DMN.

Cream is plentiful in the West and multiples on the top of the range moved lower this week. Downtime for churn maintenance caused a few plants to lower cream input, making more available to spot purchasers. Butter making is strong, despite a few facilities limited from personnel shortages. Churns are busy heightened by the holiday weekend. Retail and food service demand is strong, exports steady.

Grade A nonfat dry milk closed Friday at $1.17 per pound, up 1.75 cents on the week but 69 cents below a year ago, with 13 sales put on the board at the CME.

Tuesday's GDT Pulse saw 2.2 million pounds of Fonterra whole milk powder sold, same as on May 9, but at $3,150 per metric ton, down $25 from the last Pulse and down $45 from the May 16 GDT. HGD says "WMP prices dipped again after edging upwards at the previous GDT Auction. Demand remains volatile but has yet to overcome abundant stocks to push prices higher."

The world is waiting on China whose April imports were mixed. Skim milk powder continued to trend above the previous year although falling just short of March 2021, according to HGD. SMP totaled 78.2 million pounds, up 45.7% from April 2022, while whole milk powder, at 90.5 million pounds, was down 31.8%.

Imports increased from the top three origination countries, New Zealand, Australia, and Germany, says HGD, and "Other than the United States and Argentina, Europe recorded all other losses."

Whey imports totaled 116 million pounds, up 13.5% and up 43.8% year to date. HGD says China whey imports marked the ninth consecutive month above prior year levels due to greater shipments from Poland, second highest in market share. The U.S. remains the top origination country with 50% market share. The rising milk supply from school closings and resulting increased cheese output, likely means we will have even more whey to get rid of.

China's butter imports, at 15.7 million pounds, were down 27.7%, and cheese, at 28.7 million pounds, was up 18.7%. Infant formula and fluid milk and cream imports were up 30.6% and 12.7% respectively from a year ago.

The May 22 Daily Dairy Report says "China's lackadaisical buying has put downward pressure on global markets, and it will be difficult for commodity prices to increase in earnest until the world's largest dairy importer returns to the table."

Robo Bank Senior Dairy Analyst Lucas Fuess echoed those comments in the May 29 ‘Dairy Radio Now’ broadcast. Fuess said the hope is that the back half of 2023 will be supported by continued robust exports.

Cooperatives Working Together (CWT) member cooperatives accepted eight offers of export assistance this week that helped capture sales of 1.6 million pounds of American-type cheese, 55,000 pounds of butter, and 44,000 pounds of whole milk powder. The product is going to customers in Asia, Middle East-North Africa, Oceania, and South America through November.

CWT's 2023 exports now total 18.6 million pounds of American-type cheeses, 594,000 pounds of butter, 2,000 pounds of anhydrous milkfat, 24.6 million pounds of whole milk powder and 3.6 million pounds of cream cheese. The products are going to 19 countries and are the equivalent of 392.6 million pounds of milk on a milkfat basis, according to the CWT.

In politics, the National Milk Producers Federation, U.S. Dairy Export Council, Consortium for Common Food Names (CCFN) and allied organizations commended the recent introduction of the ‘Safeguarding American Value-Added Exports’ (SAVE) Act to promote the protection of common names in the 2023 Farm Bill.

The language directs USDA Foreign Agricultural Services to work with the U.S. Trade Representative to include the protection of commonly used terms like "parmesan", "chateau" and "bologna" as a priority in international negotiations. This is the first farm bill effort on common names, according to NMPF.

"The lack of strong action by previous administrations has allowed the European Union to misuse and abuse its geographical indications, hurting U.S. exporters in several markets," said Jaime Castaneda, Executive Director of CCFN. "This new emphasis on protecting common names is a much-needed step to ensure our producers can sell their products in markets around the world."

The International Dairy Foods Association (IDFA) announced the annual Capitol Hill Ice Cream Party will take place on the National Mall on June 21. This year's party will feature America's top flavors, toppings, and ways to eat ice cream, as detailed by a recent IDFA survey.

Chocolate, cookies n’ cream, and vanilla top the list of consumers’ favorite flavors. Sandwiches are the most popular novelty product, beating out cones 48% to 21%, followed by sticks/pops at 12%. Chocolate is the most popular topping sauce, topping caramel 26% to 18%. Waffle cones beat out sugar cones 32% to 12% among consumers, but 37% of consumers prefer to eat their ice cream out of a bowl, says the IDFA.