The Agriculture Department’s latest data shows output at 18.28 billion pounds, up 1.5% from September 2021. The 24-State total, at 17.5 billion pounds, was up 1.6%. It is the third monthly increase in 2022 and revisions raised the 50-State August total by 15 million pounds to 19.03 billion, up 1.7% from a year ago instead of the 1.6% originally reported.
Cow numbers were expected to rise but the September herd totaled 9.41 million, down 2,000 head from August numbers, which were revised 14,000 head lower. The September herd was up 6,000 from a year ago, the first time since September 2021 the herd size was above a year ago, but it was 8,000 less than the peak in May.
StoneX called the report “neutral to slightly bullish,” and “with only 52,000 cows added to the herd over four months, 2022 presented the weakest herd expansion seen in the U.S. over the last 15 years.”
Output per cow averaged 1,943 pounds, up 27 pounds or 1.4% from September 2021. August output was revised up 4 pounds, to 2,022 pounds.
California output totaled 3.3 billion pounds, up 0.5% from a year ago. Cow numbers were up 4,000 and output per cow was up 20 pounds. Wisconsin produced 2.6 billion pounds, up 0.9%. Cow numbers were down 7,000 but output per cow was up 30 pounds.
Idaho was up 2.4% on a 30-pound gain per cow and 6,000 more cows. Michigan was down 0.7%, Minnesota was up 0.6%, New Mexico was down 3.3%, and New York was up 2.2%. Pennsylvania was off 0.1%, South Dakota was up 14.9% and Texas was up 8.5%.
Oregon was down 0.9% on a loss of 1,000 cows and unchanged output per cow.
Washington state was down 1.2% on 7,000 fewer cows, though output per cow was up 30 pounds.
Dairy cow culling slipped in September. An estimated 260,500 head were sent to slaughter under federal inspection, according to the latest Livestock Slaughter report, down 5,600 head from August and 4,100 or 1.5% below September 2021. Culling in the nine months totaled 2.28 million head, down 59,800 or 2.6% from a year ago.
Butter stocks down, cheese aplenty
U.S. butter stocks remain well below a year ago, according to the latest Cold Storage report. Sept. 30 butter dipped to 267.3 million pounds, down 11 million pounds or just under 4% from the August total, which was revised down 4.3 million pounds, and down 57.1 million or 17.6% below a year ago. It was the 14th consecutive month stocks were below the previous year.
American type cheese stocks inched up to 843 million pounds, up 1.5 million pounds or 0.2% from August, but down 1.1 million or 0.1% from a year ago.
The “other” cheese category fell to 603.5 million pounds, down 15.3 million or 2.5% from the August level, which was revised 1.5 million pounds lower, but was up 11.6 million pounds or 2.0% above a year ago.
The total cheese inventory slipped to 1.47 billion pounds, lowest since March, down 11.9 million pounds or 0.8% from August, but only 11.7 million or 0.8% above a year ago. It was still a September record, according to the DDR.
Pulse down again
Tuesday’s Global Dairy Trade Pulse Auction saw another 2.2 million pounds of Fonterra whole milk powder being sold, same as the last Pulse, but at $3,280 per metric ton. That’s down $145 or 4.2% from the Oct. 11 Pulse and down $75 or 2.2% from the Oct. 18 main GDT. HighGround Dairy says this is the lowest price since Event 275 on Jan. 5, 2021, “indicating further weakness into next week’s main GDT.”
Cheese & butter strong
CME Cheddar block cheese closed Friday at $2.0575 per pound, up 0.75 cents on the week and 24.75 cents above a year ago.
The barrels climbed to $2.2050 last Wednesday, but closed Friday at $2.09, down 3.50 cents on the week, after losing a dime the week before, but were 22.75 cents above a year ago and just 3.25 cents atop the blocks. Only 1 car of block was sold all week and 13 of barrel.
Monday’s trading took the blocks up a penny on a trade but they were offered 2 cents lower Tuesday, falling to $2.04.
The barrels were offered down 3 cents Monday and fell 5.50 cents Tuesday, to $2.0050 on a trade.
Midwest cheesemakers viewed the barrel-block price inversion as “an inhibitor,” says Dairy Market News. Barrel averages topped the blocks since April as barrel inventories remain snug. Cheese demand for all varieties is strong and Midwest vats are running actively, either just keeping up or running behind orders. Milk availability has tightened despite growing output, says DMN.
Looking westward, export cheese demand remains strong, especially from Asian buyers. Cooler weather regionally is contributing to cow comfort and thus milk output.
Butter climbed to $3.20 per pound last Tuesday and closed there Friday, 2.50 cents higher on the week and $1.3650 above a year ago. There were no CME sales all week.
The butter was offered a penny lower Monday and fell 3.75 cents Tuesday on a trade, slipping to $3.1525, lowest since Sept. 30.
“Butter demand is exactly where contacts expected it to be in mid to late October: vigorous,” says DMN. Plants are working to keep up with demand, but minds ponder how long the price will remain in the clouds.
Milk is moving steadily into Class II production in the West. Some plants are acquiring additional cream to maximize production and meet current demand. Other plant schedules are limited due to labor shortages or scheduled maintenance. Some retail customers are “fervently looking for additional butter,” says DMN, “as they underestimated their fourth quarter needs.”
Grade A nonfat dry milk fell to the lowest price since Oct. 5, 2021, last week, closing Friday at $1.42 per pound, down 7 cents on the week and 11.75 cents below a year ago. 13 cars were sold on the week.
Traders left the powder unchanged Monday and Tuesday.
CME dry whey closed Friday at 44 cents per pound, 0.25 cents lower on the week and 17.75 cents below a year ago, with 1 sale reported for the week at the CME.
The whey was also unchanged Monday and Tuesday.