Australia and New Zealand are at heightened risk of foot and mouth disease
You’ll recall that April milk production was down one percent from April 2021. The April Dairy Products report shows powder production showed the biggest increase.
Cheese output totaled 1.156 billion pounds, down 4.5% from March and just 0.1% above Apr. 2021, keeping in mind that April cheese stocks were up 2% from a year ago. Total cheese output for the first four months of 2022 amounted to 4.6 billion pounds, up 2.5% from the same period a year ago.
Wisconsin produced 282.8 million pounds of the April total, down 5.9% from March and 3.8% below a year ago. California provided 205.2 million pounds, down 3.8% from March and 1.1% below a year ago. Idaho added 86.2 million pounds, down 3.5% from March and 0.9% below a year ago.
Italian cheese totaled 489 million pounds, down 5.5% from March but 1.2% above a year ago. YTD Italian stands at 1.98 billion pounds, up 3.4%.
American type cheese, at 465.4 million pounds, was down 1.8% from March and 2.7% below a year ago. YTD output, at 1.85 billion pounds is up 0.6%.
Mozzarella totaled 385.8 million pounds, up 2.3% from a year ago, with YTD at 1.5 billion pounds, up 3.8%.
Cheddar, the cheese we watch daily at the CME, dropped to 321.0 million pounds, down 6.2 million pounds or 1.9% from March and down 16.8 million pounds or 5.0% below April 2021. It’s why CME prices remain strong.
April butter output fell to 181.2 million pounds, down 20.7 million pounds or 10.3% from March, and 1.8 million or 1.0% below a year ago. YTD butter is at 760.6 million pounds down 4.2% from a year ago. Butter stocks, you’ll recall, were down 23% from April 2021.
Yogurt output totaled 378.1 million pounds, down 8.9% from a year ago, with YTD output at 1.56 billion pounds, down 4.3%.
Dry whey production slipped to 82.8 million pounds, down 300,000 pounds or 0.3% from March, but was 5.4 million pounds or 7.0% above a year ago. YTD is at 316.6 million pounds, up 0.5%.
Dry whey stocks totaled 73.1 million pounds, up 4.2 million or 6.1% from March and 12.8 million pounds or 21.2% above those a year ago.
Nonfat dry milk output crept to 195.8 million pounds, up 4.5 million pounds or 2.3% from March and up 2 million or 1.0% above a year ago. YTD powder was at 728.2 million pounds, down 7.2%.
Stocks totaled 298.7 million pounds, up 10.9 million pounds or 3.8% from March and up 1.3 million pounds or 0.4% above those a year ago.
Skim milk powder output climbed to 35.6 million pounds, up 2.5 million pounds or 7.3% from March but down 20.4 million or 36.4% below a year ago. YTD SMP was at 141.7 million pounds, down 29.3% from a year ago.
The Agriculture Department lowered its milk production estimates for 2022 and 2023 its latest World Agricultural Supply and Demand Estimates report (WASDE), citing slower growth in milk-per-cow than previously expected in 2022. A lower milk per cow estimate in 2023 resulted in the lower 2023 projection.
2022 production and marketings were estimated at 226.4 and 225.4 billion pounds respectively, down 300 million pounds on production and 200 million on marketings from last month’s estimates. If realized, 2022 production would only be up 100 million pounds from 2021.
2023 production and marketings were estimated at 229.3 and 228.2 billion pounds respectively, down 200 million pounds on each. If realized, 2023 production would be up 2.9 billion pounds or 1.3% from 2022.
Price forecasts for cheese, butter, and nonfat dry milk (NDM) were raised from last month on recent price strength and stronger anticipated demand. The whey price forecast was lowered on observed prices. With mostly stronger product prices, both Class III and Class IV milk prices were raised.
The 2022 Class III milk price was projected to average $22.90 per hundredweight, up 15 cents from last month’s projection, and compares to $17.08 in 2021. The 2023 average is estimated at $20.65, also up 15 cents.
The 2022 Class IV average is pegged at $24.65, up 85 cents from a month ago and compares to $16.09 in 2021. The 2023 average is projected at $21.90, up 50 cents from last month’s estimate. I’ll have more details next week.
In the week ending May 28, 49,900 dairy cows were sent to slaughter, down 3,000 head from the previous week, and 3,700 or 6.9% below a year ago.
This week’s Crop Progress report shows 94% of U.S. corn was planted, as of the week ending June 5, up from 86% the previous week, 4% behind a year ago, and 2% ahead of the most recent five year average. The report shows 78% emerged, down from 89% a year ago, and 3% behind the five year average. 73% is rated good to excellent, compared to 72% a year ago.
Soybean planting was at 78%, up from 66% the previous week, but 11% behind a year ago and 1% behind the five year average. The report adds that 56% have emerged, 18% behind a year ago, and 3% behind the five year average.
This week’s Global Dairy Trade auction reversed direction, ending five consecutive declines, as China re-opens and global milk output remains in question. The weighted GDT average was up 1.5%, following the 2.9% drop May 17. Traders brought 47.3 million pounds to the market, down from 53.5 million on May 3, and the average metric ton price was at $4,656 U.S., up from $4,432.
The gains were led by butter, up 5.6%, after falling 1.0% in the last event. Anhydrous milkfat was up 2.7%, after inching 0.6% higher last time. Buttermilk powder was up 4.5% and skim milk powder was up 3.0%, after slipping 0.6%.
Whole milk powder was off 0.3%, after dropping 4.9% last time, and GDT Cheddar was down 3.6%, after slipping 0.1% last time.
StoneX Dairy Group says the GDT 80% butterfat butter price equates to $2.6851 per pound U.S., up 14.1 cents after dropping 2.5 cents in the last event, and compares to CME butter which closed Friday at $2.9750. GDT Cheddar, at $2.4334, was down 12.3 cents after losing 0.8 cents last time, and compares to Friday’s CME block Cheddar at $2.2550. GDT skim milk powder averaged $1.9231 per pound, up from $1.8669. Whole milk powder averaged $1.8861 per pound, up from $1.7845. CME Grade A nonfat dry milk closed Friday at $1.8550.
StoneX Chinese offices report Covid numbers are in decline in China, allowing authorities to slowly reopen many areas of Shanghai, Beijing, and elsewhere.
That said, China remained noticeably less active in the GDT, says StoneX. “Chinese buying accounted for less than 20% of the whole milk powder volume, which overall was down from the previous event. When the Chinese are active they can account for upwards of 50% or more of the WMP volume.”
Meanwhile, U.S. cheese exports set a record for April, totaling 91.2 million pounds, up 2.4% from April 2021, and up 9.5% year to date, according to the latest data. Mexico remained the top destination, says HighGround Dairy, up eight percent.
Speaking in the June 13 Dairy Radio Now program, HGD’s Lucas Fuess reported that Cheddar exports hit 20.4 million pounds, up 107.6%, much of it going to Japan and South Korea, as Asian countries look for more affordable prices.
Butter exports totaled 9.8 million pounds, down 9.7%, though YTD are up 24.9%. This was the first drop since November 2020, according to HGD, but compares to strong shipments a year ago that were difficult to match, according to Fuess.
Nonfat and skim milk powder, at 162.1 million pounds, was down 6.3% and down 7.8% YTD. HGD says April was the fifth month in a row they fell short of the previous year, due to decreased exports to Egypt and Vietnam.
Dry whey exports totaled 37.5 million pounds, down 18.9% from a year ago and down 22.1% YTD.
Fuess says the export numbers are impressive considering the shipping issues, port congestion, and increased costs we have been dealing with. He expects this success to continue in cheese and possibly nonfat dry milk, as the world is short on product. “Hopefully the U.S. become a source of preference,” he concluded.
Cooperatives Working Together (CWT) members accepted 31 offers of export assistance this week to capture sales of 2.5 million pounds of American-type cheese and 604,000 pounds of cream cheese. The product is going to customers in Asia and Central America through December.
One more global news item, the June 3 Dairy and Food Market Analyst reported that Australia and New Zealand are at heightened risk of foot and mouth disease. The viral disease affects cloven-hoofed animals and “is spreading like wildfire in Indonesia where it has infected more than 20,000 animals. Indonesia is a popular tourist destination for Australians and Kiwis,” the Analyst noted.
“Modelling by the Australian Bureau of Agricultural and Resource Economics and Sciences in 2013 determined that a large outbreak of FMD in Australia would have a significant financial impact, estimated at the time to be around $50 billion over 10 years. Before this outbreak, Indonesia had been free of FMD for more than 30 years,” according to the Analyst.
Checking Chicago; butter hit $3 per pound Wednesday, first time in seven years. But it closed Friday at $2.9750, up 6 cents on the week, fifth consecutive week of gain, highest CME price since Sept. 28, 2015 when it was at $3.05, and was $1.1825 above a year ago. There were 28 sales on the week at the CME.
Central butter producers report that cream quickly tightened following its extra availability over the Memorial Day holiday, according to Dairy Market News. Plant managers were hoping to get a better gauge on cream availability and, if this is an indicator of things to come, micro-fixing bulk butter will shift higher, they said.
Micro-fixing is thawing 68-pound blocks and cutting them into consumer size blocks or sticks. The down side is that micro-fixing requires more employees than does churning so current staff shortages are a problem, according to DMN.
Butter and ice cream production is contributing to strong demand for cream in the West. Other regions are also looking for cream however high fuel prices and limited tanker availability is limiting that. Butter output is steady, though output at some plants the last few months has been below expectations, due to labor shortages and delayed deliveries of production supplies. Butter demand is softening from food service and retail. Concerns with the rising food and fuel prices have resulted in consumers picking cheaper, private label brands or butter alternatives, says DMN.
Cheddar block cheese hit $2.28 per pound Monday but closed Friday at $2.2550, down 1.50 cents on the week, third week of decline, but 75.50 cents above a year ago.
The barrels hit $2.3050 on Thursday, but finished at $2.2425, 0.25 cents lower on the week, 57 cents above a year ago, and 1.25 cents below the blocks. There were six sales of block reported on the week and 21 of barrel.
Milk availability increased for Midwest Class III producers this week, according to DMN. School milk demand declines and steady weather is the reason. Cheese production, therefore, is mostly active though limited due to ongoing employee shortages but cheese orders are steady.
Food service cheese demand is, reportedly, softening in the West as some restaurants in the region decrease hours amid labor shortages and lighter demand. Retail demand is also trending lower; likely due to the increased costs pushing customers to reduce cheese purchases. Export demand remains strong.
Grade A nonfat dry milk hit $1.8850 per pound Wednesday, highest since February 16, but closed the week at $1.8550, 0.75 cents lower but 55.50 cents above a year ago. There were 9 sales were reported on the week.
Dry whey fell to 51.75 cents per pound Tuesday but closed Friday at 54.25 cents, down 1.50 cents on the week and 8.50 cents below a year ago, on 7 sales.
In politics, a press release this week by the National Milk Producers Federation pointed out that the deadline is approaching for U.S. Food & Drug Administration guidance on the labeling of plant-based alternatives.
“Dairy farmers and the entire industry are readying for a milestone in the decades-long effort we’ve led to ensuring integrity in marketplace labeling of dairy products,” NMPF stated. “The news could be good for consumers, or it could be insufficient for their needs, the agency has been very tight-lipped in our conversations with them.”
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 firstname.lastname@example.org.