New Zealand milk solids production in January was better than expected

America’s dairy cows put plenty of milk in the tank in January, thanks to milder weather and an increase in numbers. The U.S. Department of Agriculture’s preliminary data shows January output at 19.3 billion pounds, up 1.3% from January 2022. The 24-state total, at 18.5 billion pounds, was up 1.5%.Revisions lowered the 50-state December total by 30 million pounds to 18.9 billion, up 0.6% from a year ago instead of the 0.8% increase originally reported.Cow numbers totaled 9.4 million, up 9,000 head from the December count which was revised 4,000 head lower. The January herd was up 38,000 head from a year ago and the largest since Oct. 2022. The 24-state head count was up 9,000 from December and 51,000 above a year ago, also the largest since October 2022.Output per cow averaged 2,052 pounds, up 18 pounds or 0.9% from January 2021. The December output per cow was revised two pounds lower.Output for all of 2022 was reported at 226.5 billion pounds, up just under 0.1% from 2021, but up 12.5% from 2013. Cow numbers, at 9.40 million, were down 0.5% from 2021 but 1.9% above those in 2013. Output per cow averaged 24,087 pounds in 2022, up 139 pounds from 2021 or 0.6% and up 10.4% from 2013.January output in California totaled 3.5 billion pounds, down one million pounds, virtually unchanged from a year ago, with 4,000 fewer cows and a loss of 5 pounds per cow. Wisconsin, at 2.7 billion pounds, was up 44 million or 1.6%, as a milder winter gifted a 40-pound gain per cow, with 3,000 fewer cows milked.Texas was up 5.2%, thanks to 22,000 more cows and a 35-pound gain per cow. Idaho was up 2.6%, on 12,000 more cows and a 15-pound gain per cow.Florida again registered the biggest loss, down 11.4%, on 12,000 fewer cows. Michigan was up 2.1%, thanks to a 40-pound gain per cow and 2,000 more cows.Minnesota was up 1.1% on a 25-pound gain per cow offsetting the loss of 1,000 cows. New Mexico was down 4.1%, with 13,000 fewer cows, though output per cow was up five pounds. New York was up 3.5%, thanks to 10,000 more cows in the string, and a 40-pound gain per cow.Oregon was down 1.4%, on a loss of 2,000 cows. Output per cow was up five pounds. Pennsylvania inched up 0.1% on a 10-pound gain per cow offsetting the loss of 2,000 cows.South Dakota scored the biggest gain, up 9.1%, thanks to 17,000 more cows offsetting a 15-pound loss per cow. Vermont was up 0.9% on a 30-pound gain per cow offsetting 1,000 fewer cows. Washington State was down 1.9% on 7,000 fewer cows however output per cow was up 15 pounds, according to the USDA.Matt Gould, former analyst and editor of the “Dairy and Food Market Analyst” and now editor of “The Weekly Wire,” asked in the February 27 “Dairy Radio Now” broadcast if the report was a new data point or the beginning of a new trend.Gould said he had predicted a 1.8% increase in December, but it turned out to be just 0.8% and “appeared to be a real downshift of the US milk production growth trend.” The 1.3% increase in January is against a very weak comparable last year, he said, and while “We are seeing milk production growth, it is by no means a wall of milk out there. We are seeing a downshift in the marketplace.”He also pointed out the regional difference. California had a very wet January, he concluded, therefore production was flat while “The Midwest made up the difference, helped by mild weather.”Tough times on the farm have increased dairy cow culling. The USDA’s latest Livestock Slaughter report shows an estimated 297,900 head were sent to slaughter under federal inspection in January, up 31,600 head from December, and 37,100 or 14.2% above January 2022.The week ending February 11 saw 67,400 head go to slaughter, down 2,600 from a year ago, first time it was below a year ago since the week ending December 3, 2022. Year to date however, 406,000 cows had been sent to slaughter in 2023, up 21,500 head or 5.6% from the same period in 2022.Direction reversed in the February 21 Global Dairy Trade where the weighted average fell 1.5%, after jumping 3.2% on February 7.Anhydrous milkfat led the declines, down 2.6%, after jumping 4.8% on February 7, however butter was up 3.8%, following a 6.6% advance on February 7. Skim milk powder was down 2.4%, after holding steady last time and whole milk powder was down 2%, following a 3.8% rise. Cheddar was up 1.5% after a 2.3% gain.StoneX Dairy Group says the GDT 80% butterfat butter price equates to $2.1782 per pound U.S., up 7.8 cents, after gaining 13.1 cents on February 7 and compares to CME butter which closed Friday at a pricey $2.43. GDT cheddar, at $2.3068 was up 4.8 cents and compares to Friday’s CME block cheddar at a bargain $1.88. GDT skim milk powder averaged $1.2559 per pound, down from $1.2834 and whole milk powder averaged $1.4806 per pound, down from $1.5101. CME Grade A nonfat dry milk closed Friday at $1.2150 per pound.With less volume available for purchase, many region’s purchases were lower than they were in the last GDT, says StoneX’s Dustin Winston. “However, North Asian purchases, which includes China, were higher than both the last event and last year as the region continues to stay above 50% market share after their return to that market at the start of February.”Interestingly, New Zealand milk solids production in January was better than expected, according to Winston, up 1.9% from last year. “Last season, January production was down 6.1%, so it is worth noting that production is currently lapping over an easy comparison,” he said. “Season to date milk solids production is now only down 1.5% from the 21/22 last season.”“Weather has been somewhat out of this world for New Zealand,” he wrote, the aftermath of Cyclone Gabrielle. “If you look on the news you will see stores flooded and cows swimming. The reports that we are getting is that the impact on milk production isn’t as severe as the news makes it out to be.”Cooperatives Working Together (CWT) member cooperatives accepted ten offers of export assistance this week from CWT that helped capture sales contracts for 2 million pounds of American type cheese. The cheese is going to customers in Asia and Oceania from March through August.U.S. dairy margins were relatively flat over the first half of February with limited price movement in the milk and feed markets, according to the latest Margin Watch (MW) from Chicago based Commodity and Ingredient Hedging LLC.“While milk price changes have been limited,” the MW said, “There has been some discrepancy between classes as class III has been moving lower while class IV prices have been increasing and are up around $1.00 per hundredweight since the beginning of the month. The rebound in spot butter helped support class IV milk, with cash butter up 15.25 cents since the end of January. Block and barrel cheese prices have been moving sideways to offer limited direction to class III. The recent weakness in milk prices combined with sky-high feed costs continue to crimp spot margins. This has led to increased dairy cow slaughter.”“USDA made minor adjustments to domestic corn and soybean balance sheets in the February WASDE, although sizable production cuts were noted for Argentina. The corn crop was reduced five million tons from January to 47 million while the soybean crop was cut 4.5 million tons to 41 million. Further cuts are expected as the country has been decimated by drought during their growing season. This will significantly reduce global supplies of corn and soybean meal which has kept both markets elevated at historically high levels. Expectations are growing for increased corn acreage in the U.S. this season given profitability dynamics among competing crops and the USDA’s Outlook Forum at the end of the month is expected to provide the first set of estimates,” the MW concluded.The March Federal order class I base milk price was announced at $18.99 per hundredweight, down $1.79 from February and $3.89 below March 2022, lowest hundredweight I since November 2021. It equates to $1.63 per gallon, down from $1.97 a year ago. The three-month class I base average stands at $20.73, down from $21.41 a year ago and compares to $15.29 in 2021.Speaking of fluid milk, U.S. sales did not improve the last month of 2022. The U.S. Department of Agriculture’s latest data shows December packaged fluid products totaled 3.8 billion pounds, down 3.7% from December 2021.Conventional product sales totaled 3.5 billion pounds, down 3.3% from a year ago. Organic products, at 230 million pounds were down a hefty 9.4%, but represented a typical 6.1% of total sales for the month.Whole milk sales totaled 1.3 billion pounds, up 0.4% from a year ago, up 1.3% year to date and represented 34.2% of total milk sales for 2022.Skim milk sales, at 190 million pounds, were down 8.8% from a year ago and down 8.6% for the year.Total packaged fluid sales for 2022 amounted to 43.3 billion pounds, down 2.4% from 2021. Conventional product sales totaled 40.4 billion pounds, down 2.4%. Organic products, at 2.8 billion, were down 2.0%, and represented 6.6% of total 2022 sales. The figures represent consumption in federal milk marketing order areas, which account for approximately 92% of total fluid milk sales in the U.S.In politics, it appears that so called “identity politics” is even ruling the dairy industry. The Food and Drug Administration issued a draft guidance this week that allows plant-based beverages to continue using the term “milk” and allows for such beverages to include a “voluntary” nutrient statement on its label.The draft drew fire from the Wisconsin based American Dairy Coalition and other dairy groups. Dairy processors had not issued a statement as of our deadline.The National Milk Producers Federation’s (NMPF) Jim Mulhern said the draft is “A step toward labeling integrity for consumers of dairy products, even as it falls short of ending the decades old problem of misleading plant-based labeling using dairy terminology. By acknowledging the utter lack of nutritional standards prevalent in plant-based beverages and the confusion over nutritional value that’s prevailed in the marketplace because of the unlawful use of dairy terms, FDA’s proposed guidance will provide greater transparency that’s sorely needed for consumers to make informed choices.” “The decision to permit such beverages to continue inappropriately using dairy terminology violates FDA’s own standards of identity which clearly define dairy terms as animal-based products,” says NMPF.CME block cheddar shot up to $1.96 per pound the day after the President’s Day holiday on Monday, highest in three weeks, but closed Friday at $1.88. That’s unchanged on the week but 6.50 cents below a year ago, as traders weighed January milk output and anticipated the afternoon’s January Cold Storage report.The barrels climbed to $1.60 on Wednesday but closed Friday at $1.54, down 0.75 cents on the week, 36 cents below a year ago and 34 cents below the blocks. CME sales totaled six cars of block for the week and 37 of barrel.Midwest cheesemakers are busy, but winter storms threatened plant downtime, according to Dairy Market News (DMN). Spot milk loads hit $10 under class III for the ninth week in a row with the upper end of the price range at midweek at $4 under. Upcoming school breaks are expected to keep milk widely available for cheese vats and demand notes were similar to previous weeks. Barrel cheese makers continue to say orders are lagging previous years, but some are starting to see growth in customer interest, potentially as a result of current price levels. Prices are generally viewed as healthy, particularly as blocks hold around $2.Domestic cheese demand is mixed in the West. Retail and food service purchases are steady to lighter. Contract sales keep a steady pace towards finishing up with second quarter bookings and starting third quarter. Export interest is mixed as some report lighter demand and note it is shifting more production from barrels to blocks, while others report strong demand, says DMN.Cash butter says its Friday finish at $2.43 per pound, up 5.50 cents on the week, but 15.75 cents below a year ago. There was only one sale on the week at the CME.Midwest butter producers say there is a lot of cream available and plants are easing back orders as they near capacity at least into early March. Winter storms were expected to push already busy cream handlers to find new destinations. Butter demand remains steady, with producers focused on fall demand.Cream is “plentiful to balanced” in the West, says DMN, though demand remains “steady to light.” Reports continued regarding short staffing, but butter output remained strong. Demand ahead of the forecasted increase related to spring holidays is reported as “light to weak.” Retail demand is light to weak with some reports below seasonal forecasts. Export demand is “light,” according to DMN.Grade A nonfat dry milk closed Friday at $1.2150 per pound, down 0.50 cents on the week and 64.50 cents below a year ago, with 10 sales put on the board for the week.Dry whey finished the week at 46.50 cents per pound, up 1.50 cents, but 31.50 cents below a year ago. There were four CME sales reported for the week.Lee Mielke is a graduate of Brown Institute in Minneapolis, Minnesota. 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.