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U.S. milk production in March fell below that of a year ago for the first time in six years. The USDA’s preliminary 50-state data put output at 18.9 billion pounds, down 0.4% from March 2018. Output in the top 23 producing states was at 17.8 billion pounds, down 0.1%. Revisions lowered the original February total by 37 million pounds, to 16.0 billion pounds, up just 0.4% from February 2018.
March cow numbers in the 50 states totaled 9.34 million head, down 10,000 from February, 86,000 below a year ago, and the ninth consecutive month that cow numbers were below a year ago since May 2016. Output per cow managed to climb to 2,024 pounds however, up 10 pounds from a year ago and the 41st consecutive month of gain.
California production was up 0.7% from a year ago, thanks to a 25-pound gain per cow outweighing 9,000 fewer cows. Wisconsin was up just 0.4%, on a 15 pound gain per cow, but cow numbers were down 4,000 head. 
New York was up 2.3%, thanks to a 40 pound gain per cow and 2,000 more cows. Idaho was up 1.4 percent, on 9,000 more cows. Output per cow was unchanged. Pennsylvania was down for the 13th consecutive month, dropping 66 million pounds or 6.9% from a year ago, due to 29,000 fewer cows milked and 25 pounds less per cow. Minnesota was up 0.5%, on a 25 pound gain per cow offsetting 4,000 fewer cows. 
Michigan bested a year ago by 0.4%, thanks to a 15 pound gain per cow offsetting 1,000 fewer cows. New Mexico was down 3.9%, on a 10 pound drop per cow and 12,000 fewer cows milked. Texas was up 65 million pounds or 5.8% from a year ago, thanks to 27,000 more cows and a 15 pound gain per cow. 
Vermont was up 1.3 percent, on a 50 pound per cow increase offsetting 2,000 fewer cows. Florida was down 4.7%, despite a 20 pound gain per cow, but cow numbers were down 7,000 head. Washington State inched up 0.4%, on a 15 pound gain per cow outweighing a drop of 4,000 cows.
The Agriculture Department’s latest Livestock Slaughter report shows dairy cow culling picked up in March and was well above March 2018. An estimated 302,400 head were slaughtered under federal inspection in March, up 23,500 head from February and 15,500 or 5.4% above a year ago. The three month total stands at 879,800 head, up 42,500 or 5.1% from the same time a year ago.
The USDA’s annual Livestock Slaughter Summary shows 3.15 million head of dairy cows exited the business in 2018, up 164,600 head from 2017 or 5.5%. The cull number in 2018 was up 102,700 head from 2017 or 3.6%.
The Agriculture Department’s latest Cold Storage report shows March 31 butter stocks totaled 270.2 million pounds, up 26.7 million pounds or 11.0% from February but 3.8 million pounds or 1.4% below those in March 2018.
American type cheese, which includes Cheddar, totaled 784.6 million pounds, up 1.4 million pounds from February but 18 million or 2.3% above a year ago. 
The other cheese category climbed to 565.9 million pounds, up 12.9 million pounds or 2.3% from February and 36.9 million or 7.0% above a year ago. 
The total cheese inventory stood at 1.38 billion pounds, up 14.6 million pounds or 1% from February and 57.2 million pounds or 4.3% above a year ago and the 53rd consecutive month stocks topped a year ago.
FC Stone stated in its April 23 Early Morning Update; “The March Milk Production number appears to garner more attention than the Cold Storage report as market participants will want to see how April inventory numbers stack up with Easter falling 20 days later this year than 2018. We’ll also need to get a look at what overall product production looked like for March, which we won’t see until the first week of May.”
Cash dairy prices were mixed the last full week of April. The Cheddar blocks closed Friday morning at $1.6850 per pound, up 1 3/4-cents on the week and 6 1/2-cents above a year ago. The barrels, after losing 10 1/4-cents the previous week, rallied this week to finish at $1.63, 11 1/2-cents higher on the week and 14 1/4-cents above a year ago. 21 cars of block were sold on the week at the CME, highest total since early November 2018, and 19 of barrel.
Cheese demand reports were mixed this week, according to Dairy Market News. A number of Midwestern producers suggest demand is growing seasonally while others say orders have yet to pick up. Milk availability is balanced to short, compared to recent years and spot milk prices ranged from $1 over to $1 under Class. Most contacts continue to run on internally sourced milk. With fewer spot milk offers in general and cheese plant managers opting to ebb production schedules since the last half of 2018 when possible, regional contacts report a generally balanced cheese inventory unlike national inventories which remain a concern for the long-term market. 
Western cheesemakers continue to receive plenty of milk and are busy making cheese. Some are running at or near full schedules while others are more cautious. 
Contracted cheese sales and offers of specialty cheeses seem to be moving well but buyers are hesitant to take additional loads. Contacts relay overall demand is uninspiring. Cheese stocks are ample, but not burdensome. “Manufacturers hope the warming weather and outdoor festivities can resurrect the appetite for cheese as part of the backyard barbeque or picnic,” says DMN.
Butter traders, surprised by the larger than expected Cold Storage data, took the CME price down to $2.2550 Wednesday but it closed Friday at $2.27, down 1 1/4-cents on the week and 9 cents below a year ago with 26 sales on the week.
Cream supplies bound for the churns were mixed this week. Some plants have already noted tightness, others say they took on cream at prices similar to last week. That said, most expect it to tighten soon, as bottlers move nearer to wrapping up school system orders. Production schedules are mixed from plant to plant. Bulk butter is somewhat available according to brokers, while producers suggest demand has generally matched supplies, particularly in the 82% butterfat variety headed for the export market. Unsurprising to anyone in the industry, butter market tones remain “resolute,” according to DMN.
Butter inventories in the West continue to build but not at a fast pace. A lot of cream is moving to ice cream so butter makers are not receiving the cream offers of previous weeks but they still have enough for churning. Food service has started putting in butter replacement orders since their holiday stocks have cleared so butter sales are generally good. Some sellers are reevaluating holiday retail sale volumes to plan near term retail demand. The expectation is that sales will be strong in the coming months and butter makers are preparing for it.
Cash Grade A nonfat dry milk had a good week, climbing to $1.04 per pound on Friday, highest CME price since January 15, 2019, up 4 cents on the week and 19 3/4-cents above a year ago. 14 cars found new homes on the week.
The spot dry why closed Friday at 32 3/4-cents per pound, down 1 1/4-cents on the week but 1 3/4-cents above a year ago. 19 sales were reported on the week.
The Agriculture Department’s latest Crop Progress report shows 6% of the nation’s corn crop was in the ground, as of the week ending April 21, up 3% from the previous week, 1% ahead of a year ago, but 6% behind the five year average. 
The report shows 9% of the cotton crop has been planted, up 2% from the previous week, 1% behind a year ago, and dead even with the five year average. Also, 1% of U.S. soybeans have been planted, 1% behind a year ago and the five year average.
FC Stone points out that “US grain exports continue to disappoint. US soybean exports are 409 million bushels behind the pace needed to attain the USDA’s 2019 export forecast. As time marches on it’s late in the game for Chinese purchases to fill the gap. South America has ample supplies and production. 
South American currencies are cheap compared to the US Dollar, thus compounding the problem. African swine fever in China has now spread to all its provinces. It is clear that ASF is out of control and getting worse. China is attempting to secure protein from multiple sources,” according to FC Stone.
 There was good news on the dairy export front, albeit a bit old, from the U.S. Dairy Export Council (USDEC), as improved cheese shipments highlighted export performance in February. 
Cheese exports totaled 32,515 tons, up 16% from the prior year. On a daily-average basis, it was the second-best month ever, falling just short of the record achieved in March 2014. 
Sales of cheese to South Korea were the most in nearly four years at 7,154 tons, up 71%. Exporters also posted gains in sales to almost every other top market, including Mexico, up 9%; Japan, up 18%; Australia, up 8%; Southeast Asia, up 41%; and Central America, up 24%. 
Speaking in the April 29 Dairy Radio Now broadcast, HighGround Dairy’s (HGD) Lucas Fuess says the strong cheese exports to Mexico was surprising in view of the current tariff situation.
USDEC say “Exports of fluid milk and cream were up 30%, reaching a 26-month high (daily-average basis) of 10.2 million liters. Butterfat, up 34%, and whole milk powder, up 64%, also posted increases, albeit on small volumes.” 
Overall, suppliers shipped 160,457 tons of milk powders, cheese, butterfat, whey products, and lactose in February, up from the previous three months and good for the second highest February volume ever, but still down 14% from the strong performance of February 2018. Total U.S. exports were worth $468.2 million, up 3%, year-over-year. 
Totals were pulled down however by continued weakness in whey and other exports to China due to retaliatory tariffs in place since last summer, plus the spread of African Swine Fever. Overall exports of nonfat dry milk, skim milk powder (NDM/SMP), and lactose also lagged prior year levels. 
U.S. whey exports totaled 32,818 tons, down 29% from last year. Shipments to China were just 8,529 tons, down 58%, and the lowest since February 2011. Sales to Japan were down 45% as new trade agreements that benefit US competitors came into force, cutting U.S. competitiveness. But, U.S. exporters increased whey sales to Mexico by 32% and South Korea up 72%. 
 Exports of NDM/SMP totaled 55,164 tons, down 17%. Volumes to Mexico were flat, but shipments to Southeast Asia were down 11%; China, down 78%; Peru, down 83%; and the Middle East/North Africa region were down 85%. 
HGD’s Fuess says whey looks the least promising in terms of price recovery in the near term. He says that while the continued success in U.S. dairy exports is good, he believes the lower milk production prospect, declining herd size, and slower growth in milk per cow is more promising for U.S. farm milk prices.
U.S. fluid milk sales saw another month of decline, down 1.9% from February 2018, following a January drop of just 0.6%. The latest data puts February sales at 3.6 billion pounds.
Conventional product sales totaled 3.45 billion pounds, down 1.8% from a year ago. Organic products, at 196 million pounds, were down 4.3% and represented about 5.4% of total sales for the month.
Whole milk sales continue to move higher and totaled 1.16 billion pounds, up 1.0% from a year ago and made up 31.7% of total fluid sales in the month. Skim milk sales, at 275 million pounds, were down 9.3% and made up just 7.5% of total milk sales.
Total packaged fluid milk sales for the two month period totaled 7.9 billion pounds, down 1.2% from a year ago. Conventional products year-to-date totaled 7.4 billion pounds, down 1.1%. Organic products, at 429 million pounds, were down 2.7% and represented about 5.5% of total fluid milk sales for the period.
The figures represent consumption of fluid milk products in Federal milk order marketing areas and California, which account for approximately 92% of total fluid milk sales in the U.S. 
Cooperatives Working Together (CWT) members accepted 20 offers of export assistance this week to help capture sales of 182,984 pounds of Cheddar, Colby, Gouda, Monterey Jack, and Swiss cheese; 496,040 pounds of butter; 473,994 pounds of whole milk powder; and 392,423 pounds of cream cheese. 
These products will go to customers in Asia, Central America, the Middle East and South America and will be delivered from May through September. They raise CWT’s 2019 exports to 26.2 million pounds of American-type and Swiss cheeses, 3.96 million pounds of butter (82% milkfat), 1.46 million pounds of cream cheese and 23.1 million pounds of whole milk powder to 23 countries and equate to 499 million pounds of milk on a milkfat basis, according to the CWT.
Lee Mielke is a graduate of Brown Institute in Minneapolis, MN. He’s formerly the voice of the radio show “DairyLine,” and his column appears in agricultural papers across the U.S. Contact him at lkmielke@juno.com.
Lee Mielke is a graduate of Brown Institute in Minneapolis, MN. He’s formerly the voice of the radio show “DairyLine,” and his column appears in agricultural papers across the U.S. Contact him at lkmielke@juno.com.​

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