July milk production up slightly
U.S. milk production inched ever so slightly higher in July. The Agriculture Department’s latest Milk Production report showed preliminary output at 18.3 billion pounds, up fractionally from July 2018.
Output in the 24 top producing states hit 17.5 billion pounds, up 0.1%, with 11 out of the 24 in negative territory. Revisions added 26 million pounds to the original June total, now put at 18.26 billion pounds, down 0.2% from June 2018.
July cow numbers in the 50 states totaled 9.31 million head, down 9,000 from June and 82,000 head below a year ago. Output per cow averaged 1,969 pounds, up 10 pounds from June and 17 pounds above a year ago.
California output was up 2.5% from a year ago, thanks to a nice 55-pound gain per cow offsetting the 6,000 fewer cows milked. Wisconsin was down 1.0% on 6,000 fewer cows and a 10-pound drop per cow.
Idaho was up 2.1% on 10,000 more cows and a 10-pound gain per cow. New York was up 0.3%, thanks to 5,000 additional cows. However, output per cow was down 10 pounds.
Pennsylvania saw its 17th consecutive month that output was below a year ago, down 68 million pounds or 7.6% from a year ago as 35,000 fewer cows were milked and output per cow was off 15 pounds.
Minnesota was up 1.0%, despite a drop of 5,000 cows. Output per cow was up 40 pounds.
Michigan was up 0.6% on a 5-pound gain per cow and 2,000 more cows. New Mexico was down 0.9%, on 5,000 fewer cows but output per cow was up 15 pounds.
Texas was up 5.8%, easy to do with 27,000 more cows and 15 pounds more per cow.
Washington state was up 0.2%, on 1,000 more cows but output per cow was down 5 pounds from a year ago.
FC Stone says fat and protein were both a little weaker than expected but still up from last year. Taking into consideration components, milk production was up 0.4% versus last year.
GDT slips 0.2%
Tuesday’s Global Dairy Trade auction inched a little lower as the weighted average of products offered slipped 0.2%, following a 2.6% decline on Aug. 6. Sellers brought 75.9 million pounds of product to the market, down from 77.1 million pounds in the last event but still the second highest total this year.
Losses were led by rennet casein, which plunged 8.1%, following a 1.3% descent on Aug. 6. Lactose and anhydrous milkfat were both down 3.7%. Butter was right behind, down 3.4%. Anhydrous milkfat and butter fell 5.1% and 5.5% respectively last time. Skim milk powder inched 0.3% lower, following a 1.6% drop, but whole milk powder was up 2.1%, following a 1.7% decline last time. Cheddar was the only other product advancing, up 0.8%, after dropping 2.0%.
FC Stone equated the GDT 80% butterfat butter price to $1.7813 per pound U.S., down 6.2 cents from the Aug. 6 event. CME butter closed Tuesday at $2.31. GDT Cheddar cheese equated to $1.7495 per pound, up almost a penny from the last event and compares to Tuesday’s CME’s block Cheddar at a pricey $1.91.
GDT skim milk powder averaged $1.1239 per pound, and compares to $1.1257 last time. Whole milk powder averaged $1.4061, up from $1.3787. CME Grade A nonfat dry milk closed Tuesday at $1.0275 per pound.
Last week was a good one, particularly for cheese. The blocks climbed to $1.8925 per pound Wednesday though they closed Friday at $1.88, up 1 1/4-cents on the week and 22 1/2-cents above a year ago
The barrels finished at $1.7650, up 4 1/2-cents on the week and 9 1/2-cents above a year ago.
The blocks added 2 3/4-cents Monday morning ahead of the afternoon’s July Milk Production report. They inched a quarter-cent higher Tuesday, hitting $1.91, highest CME price since Nov. 22, 2016, as traders anticipated Thursday’s July Cold Storage report.
The barrels lost 1 1/2-cents Monday and dropped 4 cents Tuesday, to $1.71, widening the spread to 20 cents.
Cheese market tones are steady in the Midwest, according to Dairy Market News, and demand reports remain mostly positive. Manufacturers are not actively looking for milk though suppliers have little to offer. Cheese stocks are in general balance.
Western cheesemakers report output is active. Milk is ample in the Pacific Northwest and mountain states but diminishing in the Southwest.
“While encouraging to American dairy interests, international sales are shying away because of the higher U.S. prices compared to world competitors,” says DMN. Contacts suggest domestic demand is “adequate, but not outstanding.”
Cash butter closed Friday at $2.34 per pound, up 2 1/2-cents on the week and 3 1/2-cents above a year ago.
Monday’s butter lost a penny and fell 2 cents Tuesday, to $2.31, lowest price since May 8.
Butter churning upticks were reported last week. Cream is a little more accessible but butter makers expect to pay freight costs from either the southern portion of the region or from the West. Some believe we have seen the market turn around and back to a range-bound status. Others believe Thursday’s July Cold Storage report will be an important barometer for butter markets for the rest of 2019.
Cream is available in the West for butter churning despite some loads moving to other regions. Butter manufacturing is therefore steady to down a bit. Retail sales are stable to declining, food service demand is “livelier.”
Spot Grade A nonfat dry milk closed Friday at $1.03 per pound, up a quarter-cent on the week and 58 1/2-cents above a year ago.
The powder was unchanged Monday but inched a quarter-cent lower Tuesday, to $1.0275, with 24 offers going uncovered.
Dry whey finished Friday at 36 1/2-cents per pound, up a penny but 8 cents below a year ago.
Monday’s whey was up a half-cent and it gained 1 3/4-cents Tuesday, on unfilled bids, climbing 38 3/4-cents per pound.
U.S. fluid milk sales continue to falter. USDA’s latest data shows 3.4 billion pounds of packaged fluid sales in June Dairy month, down 4.1% from June 2018.
Conventional product sales totaled 3.3 billion pounds, down 4.2% from a year ago. Organic products, at 197 million pounds, were down 2.5% but represented about 5.7% of total sales for the month.
Whole milk sales totaled 1.2 billion pounds, down 1.5% from a year ago and made up 34.8% of total fluid sales in the month. Sales for the six-month period totaled 7.4 billion pounds, up 0.7% from a year ago.
Skim milk sales, at 257 million pounds, were down 11.5% and made up 7.5% of total milk sales for the month.
Total packaged fluid milk sales, January through June totaled 22.9 billion pounds, down 2.1% from a year ago.
Conventional products year-to-date totaled 21.7 billion pounds, down 2.0%. Organic products, at 1.2 billion pounds, were down 4.6% and represented about 5.4% of total fluid milk sales for the period.
Part of the downfall is due to the rising popularity of plant-based beverages but the Aug. 16 issue of the Dairy and Food Market Analyst (DFMA) reported that plant-based milk products have slowed some but are still rising.