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December milk output up 0.7%

Preliminary December milk output was pegged at 18.3 billion pounds in the USDA’s latest Milk Production report, up 0.7% from December 2018.


Output in the top 24 states totaled 17.4 billion pounds, up 0.9%. Revisions added 35 million pounds to the original 50-state November total, now put at 17.5 billion pounds, up 0.7% from November 2018.


The preliminary data would indicate that 2019 milk output totaled 218.3 billion pounds, up 700 million pounds or 0.3% from 2018. Cow numbers were down 67,000 from 2018 but output per cow was up 246 pounds.


Cow numbers were unchanged in December. The 50-state count totaled 9.34 million head, though the November count was revised up 8,000 head, but is 14,000 head below December 2018.


Output per cow averaged 1,957 pounds, up 86 pounds or 4.6% from November and 16 pounds or 0.8% above a year ago.


California output was up 0.5%. Cow numbers were down 5,000 head but output per cow was up 15 pounds. Revisions lowered the November total 26 million pounds, resulting in a 0.1% decrease from a year ago, instead of a 0.7% gain, as originally reported.


Wisconsin was down 29 million pounds in December or 1.1%, on a 10-pound drop per cow and 8,000 fewer cows milked. Revisions added 12 million pounds to its November output, still down 1.1% from a year ago.


Arizona again showed the biggest decline in December, down 6.4% on 12,000 fewer cows and a 15-pound drop per cow. Texas had the biggest increase, up 8.6%, thanks to 34,000 more cows and a 45-pound gain per cow.


Idaho was up 3.2%, thanks to 21,000 more cows, though output per cow was down 5 pounds.


New York was up 1.9%, on 1,000 more cows and a 30-pound gain per cow. Minnesota was down 0.1% on a loss of 5,000 cows. Output per cow was up 20 pounds.


Michigan was up 1.2% on 5,000 more cows. Output per cow was unchanged. New Mexico was up 1.9%, on a 10-pound gain per cow and 5,000 more cows. Oregon was unchanged, as an additional 2,000 cows offset a 25-pound drop per cow.


Pennsylvania was down 1.5% though output per cow was up 50 pounds, not enough to offset a drop of 22,000 cows.


Washington state was down 0.5%, on a 25-pound drop per cow. Cow numbers were up 2,000 head.


Culling up

U.S. dairy cow culling was up in December, according to the USDA’s latest Livestock Slaughter report. An estimated 265,400 head were sent to slaughter under federal inspection, up 9,300 head from November and 4,200 or 1.6% above December 2018.

The 12-month cull count stands at 3.2 million head, up 71,200 head or 2.3% from a year ago.


Bulging butter

U.S. butter supplies are plentiful. The Agriculture Department’s latest Cold Storage report shows Dec. 31 stocks at just under 190 million pounds, up 9.4 million pounds or 5.2% from November, 10.7 million or 5.9% above December 2018, and the sixth consecutive month that stocks topped year ago levels.


You’ll recall that November butter output was up 4.4% from a year ago but Matt Gould, analyst and editor of the Dairy and Food Market Analyst newsletter, pointed out in the Jan. 20 "Dairy Radio Now" broadcast that while December inventories the last several years have seen record highs, “We’re eating more butter so we need more in inventory.”


When asked if planted-based spreads maybe chipping away at butter sales, Gould said plant-based beverages have hurt fluid milk and yogurt sales, but “we’ve had a plant-based product in butter for a long time. It was called margarine and consumers have strongly rejected that of late.”


Meanwhile, American cheese stocks totaled 743.5 million pounds, up 3.2 million pounds or 0.4% from November but 56.8 million pounds or 7.1% below a year ago.


The “other” cheese category fell to 547.9 million pounds, down 9.7 million pounds or 1.7% from November but up 33.2 million or 6.4% from a year ago.


Total cheese stocks fell to 1.316 billion pounds, down 6.9 million pounds or 0.5% from November, 29.2 million pounds or 2.2% below December 2018, and the fourth consecutive month that total cheese stocks were below a year ago.


Class I drops

The Agriculture Department announced the February Federal order Class I base milk price at $17.55 per hundredweight, down $1.46 from January but is $2.25 above February 2019 and the highest February Class I since 2014.


It equates to about $1.51 per gallon, up from $1.32 a year ago. The two-month Class I average is $18.28, up from $15.21 a year ago.


Cheese tops $2, briefly

Cash cheese prices strengthened in the shortened Martin Luther King Day holiday week. The blocks topped $2 per pound for the first time since early November last Wednesday but finished Friday at $1.9950, up 3.25 cents on the week and 60.5 cents above a year ago, with 16 cars exchanging hands on the week.


The barrels climbed to $1.63 on Thursday but closed Friday at $1.61, 4.75 cents higher on the week, 43 cents above a year ago, but 38.5 cents below the blocks; 23 cars sold on the week.


Monday saw the blocks plunge 6.25 cents and lose 1.25 cents Tuesday, slipping to $1.92. The barrels were unchanged Monday but were down 2 cents Tuesday, to $1.59, an unsustainable 33 cents below the blocks.


Cheesemakers tell Dairy Market News that demand is meeting expectations so far in 2020. Barrel producers say they are not building inventories and are focusing on producing other varieties and clearing out holiday inventories of process cheese.


Regionally, cheese inventories are in good balance; however, more cheese has been and is being produced with milk at post-holiday availability levels. Milk prices have come up but some cheesemakers reported flat Class III purchases. Discounts are still reported but cheese market tones remain in a state of “unease” with the large block over barrel price spread.


Barrels are more available than blocks in the west, according to DMN, because some processors have changed their emphasis from blocks to barrels.


Sales for both are active; however, some buyers are taking a breather hoping cheese prices decline. Inventories remain available to fulfill all orders and cheese outputs are in line with seasonal norms, with many plants operating close to full.


Cash butter continued its meltdown, closing Friday at $1.86 per pound, 2 cents lower on the week and 38.5 cents below a year ago. Only 6 cars traded hands last week.


The butter lost 4 cents Monday and lopped off 4.5 cents Tuesday, dropping to $1.7750, the lowest CME price since Oct. 21, 2016.


January has been much of the same on multiple fronts, according to butter makers. There is plenty of cream and more than enough is coming from the Western-mountain states but still at affordable prices. Churning rates are very active and directed for spring demand increases, as demand is expectantly seasonally quieter in current markets. Most contacts expect the range-bound status to remain this year but at the sub-$2 average.


Western butter makers say retailers are replenishing stocks following the holidays and preparing for the spring holidays. Bulk butter buyers, prompted by lower prices, are laying on coverage for near-term needs. But other end users are slow to go after butter offers, feeling content with current holdings and noting the wide availability of cream.


Manufacturers report cream multiples are low and DMN says, “The weekly average cash butter price on the CME is below the price of the previous four years at this time.” Butter stocks are “comfortable.”


Grade A nonfat dry milk closed Friday at $1.2875 per pound, down a quarter-cent on the week but 27.5 cents above a year ago, with 20 cars sold on the week.


Monday’s powder slipped 0.75 cents and lost 0.50 cents Tuesday, sliding to $1.2750.

CME dry whey closed last week at 36.50 cents per pound, down a quarter-cent and 4 cents below a year ago, with 39 sales reported.


The whey was steady Monday but gained a penny Tuesday, climbing to 37.50 cents per pound, highest since Sept. 20, 2019.





From: Capital Press

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