November U.S. milk production appeared to be below a year ago, according to the USDA’s latest Milk Production report, but then so did October’s.
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November output slipped to 18.0 billion pounds, according to preliminary data, down just 0.4% from November 2020. Output in the top 24 major producing states totaled 17.3 billion pounds, down 0.1%.

Revisions, however, added 110 million pounds to the original October estimate, now put at 18.6 million pounds, up 0.1%, instead of the originally reported drop of 0.5%.

November cow numbers totaled 9.39 million head, down 10,000 from October, the sixth consecutive month they were down from the previous month, and 47,000 head below a year ago. The October count was lowered 5,000 head.

Output per cow averaged 1,922 pounds, up 3 pounds or 0.2% from a year ago.

California was up 32 million pounds or 1.0% from a year ago, on a 20-pound gain per cow offsetting 1,000 fewer cows milked. Revisions resulted in a 2.0% increase in October output from 2020 instead of a 1.3% decline as originally reported.

Wisconsin cows put 55 million more pounds in the tank in November than a year ago, up 2.2%, thanks to 18,000 more cows and a 15-pound per cow increase.

Michigan was off 0.8% on a 10-pound drop per cow and 2,000 fewer cows. Minnesota was up 1.9% on 6,000 more cows and a 10-pound gain per cow. New Mexico again had the biggest drop, down 13.2%, after falling 12.2% in October. Cow numbers were down 39,000 head and output per cow was down 35 pounds.

New York was off 0.2% on a 10-pound drop per cow but cow numbers were up 2,000 head.

Oregon was up 0.5% on a 10-pound gain per cow. Cow numbers were unchanged. Pennsylvania was down 3.5%, on 10,000 fewer cows and 25 pounds less per cow. South Dakota was up 16.7%, thanks to 22,000 more cows and a 15-pound gain per cow. Texas was up 2.8% on 17,000 more cows but output per cow was unchanged.

Washington state output was down 6.7% on a loss of 17,000 cows and 15 pounds less per cow than a year ago.

GDT drops 1.5%

Whole milk powder pulled the last Global Dairy Trade auction of 2021 down, as Tuesday’s weighted average fell 1.5%, the first decline since Aug. 3, and followed a gain of 1.4% on Dec. 7, 1.9% on Nov. 16, and 4.3% on Nov. 2.

Whole milk powder was down 3.3%, after inching up 0.6% on Dec. 7. All other products posted small gains, led by lactose, up 3.7%, after gaining 3.5% on Dec. 7.

Butter was up 1.0%, after leading the gains last time with a 4.6% surge. Anhydrous milkfat inched up 0.9%, following a 3.0% rise. Skim milk powder was up 0.6%, after rising 1.3% last time, and Cheddar inched 0.5% higher, following a 1.0% gain last time.

StoneX Dairy Group says the GDT 80% butterfat butter price equates to $2.5891 per pound U.S., up 2.6 cents, after jumping 11.4 cents last time and 8.2 cents the time before that. It compares to CME butter which closed Tuesday at $2.1425.

GDT Cheddar, at $2.3773, was up almost a penny and compares to Tuesday’s CME block Cheddar at $1.86.

GDT skim milk powder averaged $1.6986 per pound, up from $1.6877. Whole milk powder averaged $1.7540 per pound, down from $1.8178. CME Grade A nonfat dry milk closed Tuesday at $1.6625 per pound.

StoneX’s Dustin Winston explained: “Since whole milk powder carries the bulk of volume in the auction, the decline dragged the index down.”

Record whey price

CME dairy prices were mixed last week. The markets didn’t have a lot to feed on as regularly monitored USDA reports were few. However, traders were anticipating a heavy dose this week, starting with Monday’s November Milk Production report, the last Global Dairy Trade of 2021 on Tuesday, and Wednesday’s November Cold Storage report.

The Cheddar blocks appeared to make an attempt at $2 per pound and got to $1.9475 per pound last Wednesday, highest since Jan. 12, 2021, but closed Friday at $1.8875, 2.25 cents higher on the week and 27 cents above a year ago.

The barrels closed Friday at $1.63, down 5 cents on the week, ending four consecutive weeks of gain, but 15.50 cents above a year ago. CME sales included 9 cars of block and 38 of barrel.

The blocks fell 2.75 cents Monday on 3 trades and stayed there Tuesday at $1.86.

The barrels inched a half-cent lower Monday and were also unchanged Tuesday, holding at $1.6250, 23.50 cents below the blocks.

Retail cheese orders are very busy, according to several Midwest cheesemakers. Curd and barrel producers, particularly, told Dairy Market News that demand is strong, supplies are limited, and do not foresee a change in upcoming weeks.

Spot milk pricing mirrored the previous week, at Class III to slightly over. That said, some plants were already getting milk offers for the holiday weeks at slight discounts. Cheese market tones remain on similar ground to the past few weeks. It’s not a necessarily bearish sentiment, says DMN, but the block-over-barrel price gap “keeps the bulls corralled.”

Cheese demand is steady in the West in retail, food service, and internationally. Port congestion continues to cause delays as does the continuing shortage of truck drivers. Block inventories have been tight in recent weeks and, reportedly, tightening. Spot availability of barrels was unchanged. Cheese producers are running busy schedules in the region, as milk continues to be available.

Butter, after jumping 12 cents the week before last, suffered a meltdown last Monday, dropping 6.25 cents, but rallied to close Friday at $2.0925 per pound, down 3 cents on the week but 63.75 cents above a year ago, on 42 sales on the week.

Monday’s butter was unchanged but it shot up a nickel Tuesday to $2.1425 per pound, highest since Oct. 17, 2019, with 16 cars exchanging hands.

Bulk butter remains notably tight in the Midwest, according to DMN, and producers say customer interest is very active. Cream is available, at least from Western suppliers, however, freight costs and general limitations are tribulations for plant management.

Cream, regionally, was not as available as the previous week but demand is expected to trend lower Christmas Week and the final week of 2021. Butter market tones continued to shift bullishly on tight quantities and demand health, according to DMN.

Cream is available in the West. Demand is seasonally strong, though some contacts believe demand will decline in the coming weeks. Demand for butter is steady across retail and food service markets. International demand is strong, though some say export sales are being limited by increased delivery times due to port congestion. Spot butter inventories are limited and unsalted butter is especially tight and that is what is exported. A shortage of truck drivers continues to cause delays to deliveries of cream and production supplies plus labor shortages have caused some butter producers to reduce output, according to DMN.

Grade A nonfat dry milk saw daily gains last week and finished Friday at $1.6775 per pound, up 5.25 cents, highest since July 18, 2014, and 52.75 cents above a year ago. There were 8 carloads that found new homes on the week. In case you’re wondering, the CME record was $2.16 per pound on Dec. 5, 2007.

The powder was unchanged Monday but dropped 1.50 cents Tuesday, to $1.6625.

CME dry whey held at its record high 71.25 cents per pound for 5 consecutive sessions, but jumped 1.75 cents Friday on a sale to set a record of 73 cents per pound, 27.50 cents above a year ago.

The whey was unchanged Monday but inched a half-cent lower Tuesday, first decline since Dec. 1, slipping to 72.50 cents per pound.

Fluid sales down 5.2%
U.S. fluid milk sales offer no holiday cheer to the dairy industry. The USDA’s latest data shows October sales of packaged fluid products at 3.8 billion pounds, down 5.2% from Oct. 2020.

Conventional product sales totaled 3.5 billion pounds, down 5.2% from a year ago. Organic products, at 224 million pounds, were down 5.4%, and represented 6.0% of total sales for the month.

Whole milk sales totaled 1.2 billion pounds, down 3.9% from a year ago, with year to date consumption down 6.3%.

Skim milk sales, at 205 million pounds, were down 11.6% from a year ago and down 13.1% year to date.

Total packaged fluid milk sales for the 10 months amounted to 36.6 billion pounds, down 4.5% from 2020. Conventional product sales totaled 34.3 billion pounds, down 4.7%. Organic products, at 2.3 billion, were down 2.6%, and represented 6.4% of total milk sales for the period.

Merry Christmas. I hope you can rejoice in the reason for the season!

Kraft Heinz Co. has voluntarily recalled approximately 83,800 cases of American processed cheese slices.

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