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Nonfat dry milk exports climbed to a new record monthly high

The Agriculture Department announced the April Federal order Class III milk price at $17.67 per hundredweight (cwt.), up $1.52 from March, $4.60 above March 2020, and the highest Class III since November 2020. That put the four month average at $16.40, up from $15.84 a year ago and $14.71 in 2019.

Late Friday morning Class III futures portended a May price at $18.82; June, $18.99; July, $19.32; August, $19.31, with the peak at $19.36 in September. 

The April Class IV price is $15.42, up $1.24 from March, $4.02 above a year ago, and the highest since February 2020. Its four month average is at $14.14, down from $14.78 in 2020 and $15.69 in 2019.

Dairy margins are still slipping. A small rise in the All Milk price could not offset sharply rising feed costs and USDA’s Ag Prices report shows the March milk feed ratio at 1.75, down from 1.78 in February, and 2.24 in March 2020.

The index is based on the current milk price in relationship to feed prices for a dairy ration of 51% corn, 8% soybeans and 41% alfalfa hay. One pound of milk could only purchase 1.75 pounds of dairy feed of that blend in March.

The US All-Milk price averaged $17.40 per cwt., up 30 cents from February but 50 cents below the March 2020 average. 

The national average corn price hit $4.89 per bushel, up 14 cents per bushel from February, which followed a 51 cent rise the month before, and was priced $1.21 per bushel above March 2020. 

Soybeans averaged $13.20 per bushel, up 50 cents from February, which followed a $1.80 rise from January. The March soybean price was priced $4.73 per bushel above March 2020. 

Alfalfa hay averaged $181 per ton, up $6.00 from February and $9 above a year ago.

Looking at the cow side of the ledger; the March cull price for beef and dairy combined averaged $67.10 per cwt., up $1.50 from February, 40 cents below March 2020, and $4.50 below the 2011 base average of $71.60 per cwt.

Meanwhile, the April 30 Daily Dairy Report says USDA’s estimate of the 2020 corn harvest may have been overstated. That would reduce end-of-season stocks, according to the DDR. “May corn futures began the month at an already lofty $5.645 per bushel and finished the day at $7.40, a nearly eight-year high.” 

“Formidable exports have also helped to set the market ablaze,” the DDR stated. “USDA’s monthly balance sheets called for China to import 24 million metric tons (MMT) of corn this season, shattering the record of 7.6 MMT.”

The USDA’s latest Crop Progress report shows 46% of the U.S. corn crop was in the ground, as of the week ending May2, up from 17% the previous week but 2% behind a year ago and 10% ahead of the five year average. 8% is emerged, up 1% from a year ago, but 1% behind the five year average.

Soybean are at 24% planted, up from 8% the week before, 3% ahead of a year ago, and 13% ahead of the five year average. 16% of the cotton crop has been planted, 1% below a year ago, but mirrored the five year average

Speaking of exports, U.S. dairy products reached an all-time high in March. The gains were driven by sales to China and Mexico, according to HighGround Dairy, but were also helped by stronger trade with Southeast Asia. 

“Most impressive,” says HGD, “was the 52.7 million pounds of additional dairy products moving to China in the month. It was the strongest March on record into China with more than half of the shipments in the form of whey products.”

Dry whey exports totaled 52.7 million pounds, up 37.7% from March 2020, and up 32.8% year to date from 2020.

Nonfat dry milk exports climbed to a new record monthly high, despite the shipping challenges that existed. Nonfat/skim milk powder totaled 190.8 million pounds, up 38.8%, with YTD up 20.3%. Shipments to China grew by 12.3 million pounds and marked the highest monthly volume to China since May 2015, according to HGD, though Mexico remained the top destination and up 29%. 

Cheese exports totaled 81.4 million pounds, up 10.7%, and the strongest March on record with volumes reaching nine-month highs. HGD says gains were recorded to Mexico for the first time since last August and cheese exports to Japan were the strongest since June.

Butter shipments totaled 9.2 million pounds, up 170.7%, and up 124% YTD, highest since June 2014. Demand was most notable to Saudi Arabia, says HGD.

Dairy fat weighed heavily in this week’s Global Dairy Trade auction where the weighted average was down 0.7%, following the 0.1% slip on April 20. Traders brought 48.5 million pounds of product to market, down from 55.2 million in the last event, and the smallest amount since June 16, 2020. 

Butter led the losses, plunging 12.1%, after slipping 0.6% in the last event. Anhydrous milkfat was down 4.2%, after falling 3.3%. Cheddar was down 4.5%, after inching 1.2% higher, and lactose was off 2.0%, following a 3.4% loss.

Buttermilk powder was up 14.4%. It did not trade last time. Skim milk powder was up 2.0% and whole milk powder inched up 0.7%, after a 0.4% rise last time.

StoneX says the GDT 80% butterfat butter price equates to $2.2282 per pound U.S., down 31 cents, and compares to CME butter which closed Friday at $1.77. GDT Cheddar, at $1.9388, was down 7.3 cents, and compares to Friday’s CME block Cheddar at $1.7475. GDT skim milk powder averaged $1.5572 per pound, up from $1.5265, and whole milk powder averaged $1.8664 per pound, up from $1.8583. CME Grade A nonfat dry milk closed Friday at $1.3225 per pound.

Cooperatives Working Together (CWT) members accepted 17 offers of export assistance this week to capture sales of 352,740 pounds of cheese, 1.213 million pounds of anhydrous milkfat, and 762,800 pounds of cream cheese. The product is going to customers in Asia, and South America through September.

CWT’s 2021 exports total 14.5 million pounds of American-type cheeses, 9.9 million pounds of butter, 7.1 million pounds of anhydrous milk fat, 15.7 million pounds of whole milk powder, and 5.5 million pounds of cream cheese. 

Cash cheese prices start May heading lower. The Cheddar blocks crept to $1.8025 per pound Wednesday but closed Friday at $1.7475, down 5.25 cents on the week, though 44.25 cents above a year ago. The barrels got to $1.8450 Wednesday, highest since Nov. 12, 2020, but closed at $1.7275, 10.75 cents lower on the week, 45.75 cents above a year ago, and a more typical 2 cents below the blocks. 19 cars of block sold on the week at the CME and 12 of barrel.

Midwest cheesemakers tell Dairy Market news that spot milk offers were lighter this week but midweek prices were mostly at sub-Class levels. Cheese output is busy, as flush season is near its peak and cheesemakers are taking advantage of available spot milk discounts before milk yields begin to decline with warming weather. Generally, orders are steady. Food service acquisitions are beginning to level off, but pizza cheese and process producers continue to say loads are moving. Cheese producers are giving mixed notes regarding cheese availability. Some say they are nearly oversold, while others have slowly growing inventories. 

Western retail cheese demand was slightly lighter this week and food service demand has been leveling. Inventories of cheese remain mixed; blocks are available but barrels are noted as somewhat firm though some contacts suggest not as tight as in recent weeks. Cheese production continues to be strong, reflecting the abundance of milk in the region. There is some consternation regarding the barrel price continuing to hover over the block price however, cheese producers report market prices are in a somewhat healthy position. 

An increase in interest from Chinese importers aided in some contacts viewing the market tones with a little more bullishness, as well, says DMN.

Nate Donnay, StoneX Director of Dairy Market Insight, reminds us in his May 6 “Udder Intelligence” that “The Food Box program wraps up this month and the amount of U.S. milk moving through government programs will likely drop from 1.7% in May to 0.5% in June.” Those purchases will have to be made elsewhere.

Butter fell to $1.7350 per pound Wednesday, lowest since Mar. 24, 2021, but rallied to close Friday at $1.77, up 1.75 cents on the week and 48 cents above a year ago. 16 carloads found new homes on the week.

Central butter makers continue to report lackluster retail sales. Food service orders have picked up, but have steadied in recent weeks as pipelines filled up. Cream is tightening, but not tight, says DMN, and availability is reportedly more limited, particularly for churning, as ice cream production seasonally lifts. 

Western cream is tightening a bit. Ice cream makers are working through heavy volumes of cream and butter operations are receiving steady supplies to maintain seasonally active production. Inventories are stable. Southwestern contacts relay concern about the cream outlook this summer. Some creameries are working to grow butter inventories to insulate against potential uncertainties later this year. Retail orders are steady to lower. Food service demand appears to be leveling off. Dine-in restrictions continue to relax in many locales, but growing COVID case rates and hospitalizations are leading other areas to maintain or even strengthen restrictions. “These wide-ranging and quickly changing conditions pose a challenge to accurately forecast bulk butter needs,” says DMN. 

Grade A nonfat dry milk hit $1.3575 per pound Wednesday, highest since Oct. 17, 2014, but slipped to a Friday close at $1.3235, down 0.25 cents on the week but 49.75 cents above a year ago, with 28 sales reported for the week.

Dry whey closed the week 3.25 cents lower, at 62.75 cents per pound, still 23 cents above a year ago, with 2 sales reported on the week at the CME.

In the week ending April 25, 59,100 dairy cows were sent to slaughter, down 1,300 from the previous week and 3,900 or 6.2% less than that week a year ago. 

Checking the rear view mirror; you’ll recall March milk output was up 1.8% from March 2020, according to USDA’s preliminary data, and the latest Dairy Products report shows that a lot of that milk flowed to the cheese vat and the dryer.

Cheese output totaled a record high 1.18 billion pounds, up 12.6% from February and 4.8% above March 2020. Output for the first three months of 2021 totaled 3.35 billion pounds, up 2.3% from 2020. 

Italian type cheese totaled 502.9 million pounds, up 13.5% from February and 3.6% above a year ago. YTD Italian was at 1.4 billion pounds, up 0.5%.

American type cheese totaled 478.9 million pounds, up 12.4% from February and 7.3% above a year ago. YTD American hit 1.4 billion pounds, up 5.9%.

Mozzarella output, at 394.2 million pounds, was up 2.0% from a year ago, with YTD mozzarella at 1.1 billion pounds, down 0.8% from 2020.

Cheddar, the cheese traded daily at the CME, shot up to 338.7 million pounds, up 38.2 million pounds or 12.7% from the February level which was revised down 1.1 million, and was 24.6 million pounds or 7.8% above a year ago. YTD Cheddar stood at 986.2 million pounds, up 5.6% from 2020.

Butter churns gave us 198.9 million pounds of butter, up 12.6 million pounds or 6.8% from February, but down 1.1 million pounds or 0.6% below a year ago, and the second month in a row was below that of a year ago. YTD butter totaled 594.9 million pounds, down 0.8% from 2020.

Yogurt totaled 439.6 million pounds, up 0.3% from a year ago, with YTD at 243.6 million pounds, up 2.7%.

Dry whey totaled 84.3 million pounds, up 9 million pounds or 11.9% from February and 800,000 pounds or 0.9% above a year ago. YTD dry whey was at 243.6 million pounds, down 1.0%. 

Strong exports led to whey stocks slipping to 64.1 million pounds, down 8.3% from February and 14% below those a year ago.

Nonfat dry milk output climbed to 198.2 million pounds, up 14.6 million pounds or 8.0% from February and 24.5 million or 14.1% above a year ago. Powder production YTD stands at 579.9 million pounds, up 8.9% from 2020. 

Stocks fell to 317 million pounds, down 26.7 million pounds or 7.8% from February and were 34.4 million or 9.8% below a year ago.

Skim milk powder production jumped to 38.3 million pounds, up 6.7 million pounds or 21.2% from February but 17.5 million pounds or 31.4% below a year ago. YTD skim milk powder hit 105.9 million pounds, down 22.0% from 2020.

March regular hard ice cream output totaled 69.1 million pounds, up 7.5% from a year ago, with YTD output at 181.7 million pounds, up 4.4% from 2020.

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