January milk output hit 18.8 billion pounds, according to preliminary data in the Agriculture Department’s first Milk Production report of 2020. That’s up 0.9% from January 2019.
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Output in the top 24 states totaled 17.9 billion, up 1.2%.

Revisions added 88 million pounds to the original 50-state December total, now put at 18.37 billion pounds, up 1.2% from December 2018.

The report pegged 2019 output at 218 billion pounds, up 0.4% from 2018, slowest growth rate since 2009. Cow numbers totaled 9.34 million head, down 0.7% from 2018 and up 2.3% from 2010. The 2019 output per cow averaged 23,391 pounds, up 241 pounds. The average annual production of milk per cow has increased 10.6% from 2010, according to the USDA.

January cow numbers in the 50 states totaled 9.35 million head, up 5,000 from December but 6,000 below a year ago. The 24-state count totaled 8.82 million, up 5,000 from December and 16,000 more than January 2019.

January output per cow averaged 2,010 pounds, up 44 pounds or 2.2% from December and 20 pounds or 1% above a year ago.

California inched 0.7% higher than a year ago. Cow numbers were down 4,000 but output per cow was up 20 pounds.

Wisconsin was down 27 million pounds in January or 1.0%, on 10,000 fewer cows and a 5-pound loss per cow.

Texas showed the biggest increase, up 7.9%, thanks to 32,000 more cows and a 40-pound gain per cow.

Idaho was up 3.7%, on 23,000 more cows, though output per cow was unchanged. New York was up 2.2%, thanks to a 50-pound gain per cow but cow numbers were down 2,000 head. Minnesota was unchanged despite a loss of 5,000 cows. Output per cow was up 20 pounds.

Arizona was down 2.6% as a 60-pound gain per cow could not be offset by 11,000 fewer cows. Michigan was up 1.7% on 3,000 more cows and a 20-pound gain per cow. New Mexico was up 3%, on 9,000 more cows and a 5-pound gain per cow.

Oregon was off 0.9% on a 25-pound drop per cow. Cow numbers were up 1,000.

Pennsylvania was down 0.8% though output per cow was up 60 pounds, not enough to offset 20,000 fewer cows than a year ago.

Washington state was up 0.7%, on 2,000 more cows. Output per cow was unchanged.

Culling up sharply

Dairy cow culling was up in January, according to the USDA’s latest Livestock Slaughter report. An estimated 298,500 head were sent to slaughter under federal inspection, up 33,100 head or 12.5% from December but just 100 head above January 2019.

Butter abundance

U.S. butter supplies remain plentiful. The Agriculture Department’s latest Cold Storage report shows Jan. 31 stocks at 242.7 million pounds, up a whopping 53 million pounds or 27.9% from December, 31.5 million or 14.9% above January 2019, and the seventh consecutive month stocks topped the year ago level.

American cheese totaled 778.6 million pounds, up 28.8 million pounds or 3.8% from December but 25 million pounds or 3.1% below a year ago. A revision added 6.1 million pounds to the original December estimate.

Stocks in the “other” cheese category climbed to 551.3 million pounds, up 3.3 million pounds or 0.6% from December and 15 million or 2.8% above a year ago.

That put the total cheese inventory at 1.353 billion pounds, up 30.7 million pounds or 2.3% from December, but 16.5 million pounds or 1.2% below January 2019, and the fifth consecutive month total cheese stocks were below a year ago.

Bargain prices

The coronavirus continues to weigh heavily on virtually every market, dairy included, and is spreading. The latest reports are from Afghanistan, Bahrain and Kuwait, with increases noted in South Korea and Iran.

Cash cheese in the shortened President’s Day holiday week saw the Cheddar blocks finish at $1.7675 per pound, down 5.25 cents on the week but 17.25 cents above a year ago.

The barrels saw a Friday close at $1.59, up a half-cent on the week and 18.5 cents above a year ago.

Monday’s trading left the cheese unchanged but the blocks fell 0.75 cents Tuesday to $1.76, lowest since Dec. 17, 2019.

The barrels held at $1.59, a still too high 17 cents below the blocks.

Midwestern cheesemakers report demand is steady to slower, says Dairy Market News, as buyers eye the narrowing block-to-barrel price gap. Spot milk availability has noticeably increased in recent weeks and cheese production is increasing.

The necessity to clear increased milk supplies is also leading to more cheese output in the West though retailers’ intakes of cheese remain strong and block stocks are mostly contracted for the upcoming months.

Cash butter fell to $1.7550 per pound last Thursday and stayed there Friday, down 4.5 cents on the week and 50.5 cents below a year ago.

The butter lost 1.75 cents both Monday and Tuesday, melting down to $1.73 per pound, lowest CME price since March 26, 2015.

Cream supplies remain plentiful in the Central region and throughout the country, according to DMN. Churns are running at or near capacity and some plant managers expect to be full for at least the next two weeks. Butter sales are steady, but looking to pick up soon as seasonal spring upticks are on the horizon.

Western butter makers also say cream is plentiful and churning is active. Stocks are growing, as expected for the time of year but contacts are hoping for strong orders during the spring holidays to balance inventories and carry the market into summer, when more cream gets used in ice cream production.

Grade A nonfat dry milk jumped 3 cents last Tuesday, to $1.20, but closed Friday at $1.17, unchanged on the week and 17.25 cents above a year ago.

The powder dropped 3 cents Monday and lost 3.5 cents Tuesday, dipping to $1.1050 per pound, lowest CME price since Sept. 24, 2019.

The whey held all week at 37 cents per pound, 2.25 cents above a year ago.

It was unchanged Monday but lost 1.75 cents Tuesday, dipping to 35.25 cents per pound, its lowest price in six weeks.

Fluid plunges

U.S. fluid milk sales plunged in November. The USDA’s latest data shows 3.7 billion pounds of packaged fluid sales, down a whopping 9.4% from November 2018.

Conventional product sales totaled 3.5 billion pounds, down 10.0% from a year ago. Organic products, at 220 million pounds, were up 1.0% but represented just 5.9% of total sales for the month.

Whole milk sales totaled 1.2 billion pounds, down 8.3% from a year ago and made up 32% of total fluid sales in the month. Sales for the 11 month period totaled 13.7 billion pounds, up 0.1% from a year ago.

Skim milk sales, at 258 million pounds, were down 16.4% and made up 6.9% of total milk sales for the month.

Total packaged fluid milk sales, January through November, totaled 41.95 billion pounds, down 2.5% from a year ago. Conventional products year-to-date totaled 39.6 billion pounds, down 2.5%. Organic products, at 2.3 billion pounds, were down 2.0% and represented 5.5% of total fluid milk sales for the period.

Class I sheds 9 cents

The March Federal order Class I base milk price was announced at $17.46 per hundredweight, down 9 cents from February but $1.48 above March 2019 and the highest March Class I price in six years. It equates to $1.50 per gallon, up from $1.37 a year ago.

Milk processor saved

Bankruptcies of the two largest U.S. fluid processors, Dean Foods and Borden, are a result of consumers dishing fluid milk but it was announced last week that Dairy Farmers of America reached an agreement with Dean Foods to become “the stalking horse bidder to acquire a substantial portion of Dean’s assets and business.”

DFA has agreed to pay a base purchase price of $425 million and assume various liabilities, subject to certain adjustments, to acquire 44 of Dean’s facilities and associated direct store delivery system, as well as certain corporate and other assets and functions.”

The transaction remains subject to various approvals, including approval from the bankruptcy court overseeing Dean’s Chapter 11 reorganization and the U.S. Department of Justice.

Columnist Lee Mielke wraps up the week’s dairy industry news.

Warrnambool dairy farmer Bernie Free has emerged as the new UDV president, following a torrid year for the dairy body which has seen an exodus of members to join a breakaway representative body.

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