Spring flush pushes cheese production

Dairy prices were mostly higher last week as the Midwest dug out from an unusual Mid-April blizzard. Cheddar block cheese climbed to $1.6350 per pound Thursday but closed Friday at $1.6025, down a quarter-cent on the week and 5 3/4-cents above a year ago, as traders awaited the afternoon’s March Milk Production report.

The barrels closed at $1.50, up 4 cents on the week and 7 1/4-cents above a year ago, with 55 cars selling on the week and just 5 of block.

The blocks were up 2 3/4-cents Monday, as traders anticipated the afternoon’s March Cold Storage report, but inched back a quarter-cent Tuesday to $1.6275. The barrels were down a penny Monday and also lost a quarter-cent Tuesday, slipping to $1.4875, 14 cents below the blocks.

Midwest cheese contacts tell Dairy Market News that demand has been solid but, with increasing spring flush milk production and spot milk loads regularly available at $2 to $3 under class, manufacturers report “active production.”

Western cheese output is following normal seasonal trends, with most plants at full capacity due to the spring flush. Cheese supplies are heavy, but manageable, says DMN. “U.S. cheese prices are competitive with international prices and export interest remains active.”

Cash butter closed Friday at $2.3150 per pound, up 2 3/4-cents on the week and 22 1/2-cents above a year ago, with 39 cars exchanging hands last week.

Monday’s butter inched a half-cent higher and jumped 5 1/2-cents Tuesday to $2.3750, highest price since October 18, 2017, with 10 cars sold Monday and 23 on Tuesday.

DMN says Class II processors are pulling more milk fat volumes, but cream is readily available for butter manufacturing and most regional balancing plant operators are actively producing butter. U.S. butter prices are still below international values and “could represent a possible export opportunity for some domestic processors/traders.”

Western butter output is at a steady clip with ample supplies of cream, though volumes have eased slightly in the southern parts of the region. Some international buyers are looking at the favorable U.S. butter price points compared to European and Oceania prices.

Spot Grade A nonfat dry milk shot up to and closed Friday at 80 1/2-cents per pound, up 7 1/4-cents on the week but a nickel below a year ago, with 57 cars finding new homes on the week.

The powder ticked up 2 3/4-cents Monday, highest CME price since Oct. 5, 2017, but gave back 1 1/4-cents Tuesday, slipping to 82 cents per pound.

The six-week-old cash dry whey market closed Friday at 31 1/2-cents per pound, up a penny on the week. The whey was unchanged Monday and Tuesday.

Stocks bullish

Dairy product inventories continued to grow in March but were close to expectations or a bit below. Monday’s Cold Storage report pegged March butter at 273.6 million pounds, up 7.8 million pounds or 2.9 percent from February, but revisions reduced the February total 11.2 million pounds. Stocks are just 1.1 million pounds or 0.4 percent above March 2017.

American type cheese hit 769.3 million pounds, up 6.5 million pounds or 0.9 percent from February, but 3.4 million or just under 1 percent below a year ago, the first time they were below the previous year since April 2015.

The other cheese category grew to 529.2 million pounds, up 2.2 million pounds or 0.4 percent from February but 65.8 million or 14.2 percent above a year ago. The February total was revised up 3.6 million pounds.

The total cheese inventory stood at 1.33 billion pounds, up 10 million pounds or 0.75 percent from February and 65.4 million or 5.2 percent above a year ago.

March milk up

U.S. milk output appears to be slowing but still topped a year ago for the 51st consecutive month, hitting a bullish 17.8 billion pounds in the top 23 states. That’s up just 1.5 percent from March 2017, according to preliminary data in the USDA’s latest Milk Production report. The 50-state total, at 18.99 billion pounds, was up 1.3 percent. Revisions lowered the February estimate 35 million pounds to 16.97 billion, up 1.6 percent.

First Quarter 50-State milk output hit 54.4 billion pounds, up 1.5 percent from a year ago, with the average number of milk cows at 9.41 million head, up 9,000 from the October to December period and 38,000 more than First Quarter 2017.

March cow numbers in the 50 states totaled 9.4 million head, virtually unchanged from February but 23,000 above a year ago. Output per cow averaged 2,019 pounds, up 22 pounds from a year ago.

California topped its year-ago output for the third consecutive month, up a hefty 2.7 percent, despite a drop of 18,000 cows from a year ago. Output per cow was up 75 pounds. Weather kept Wisconsin output unchanged. Cow numbers were down 6,000 but output per cow was up 10 pounds.

Weather impacted New York, down 1.2 percent, on a 35-pound loss per cow, outweighing a gain of 3,000 cows. Idaho was up 4.0 percent, thanks to a 50-pound increase per cow and 9,000 more cows. Pennsylvania was off 0.3 percent, on a 5-pound loss per cow. Cow numbers were unchanged. Minnesota was down 1.1 percent, on 5,000 fewer cows and output per cow was unchanged.

Michigan was up 0.8 percent on a 15-pound gain per cow and 1,000 more cows. New Mexico was up 1.9 percent on 7,000 more cows offsetting a 5-pound loss per cow. Texas kept the tanks full, up 4.8 percent, thanks to 11,000 more cows and 55 pounds more per cow. Vermont was down 1.7 percent on a 15-pound loss per cow and 1,000 fewer cows. Washington state was up 3.3 percent on a 50-pound gain per cow and 2,000 more cows milked.

Culling jumps

A lot more dairy cows ended up at McDonald’s in March as low milk prices and higher feed costs drove culling decisions on the farm. The USDA’s latest Livestock Slaughter report shows an estimated 286,900 head were slaughtered under federal inspection, up 26,300 head from February and 15,800 or 5.8 percent above a year ago. A total 837,300 head were culled in First Quarter 2018, up 43,900 head or 5.5 percent from First Quarter 2017.

The 2017 Livestock Slaughter Summary shows 2.99 million head of dairy cows were slaughtered, up 1.03 million head or 3.6 percent from 2016.

Class I up

The May federal order Class I base milk price is $14.44 per hundredweight, up 34 cents from April, 76 cents below May 2017, but the highest Class I since January 2018. It equates to $1.24 per gallon, up from $1.21 in April and compares to $1.31 a year ago. The five-month Class I average stands at $14.32, down from $16.47 a year ago and compares to $14.18 in 2016.

From: Capital Press

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