U.S. dairy farmers are still putting plenty of milk in the tank but not quite as much as some expected.
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Eat This , Not that

The Agriculture Department’s preliminary June estimate was 18.96 billion pounds, up 2.9% from June 2020 and the 13th consecutive month to top output from the previous year. The 24-state total was 18.1 billion pounds, up 3.2%.

Revisions added 5 million pounds to the May 50-state estimate, now put at 19.86 billion pounds, up 4.7% from a year ago, instead of the originally reported 4.6%.

Cow numbers were down 1,000 head from May, the first time in 11 months they didn’t top those a year ago. The herd totaled 9.51 million head in the 50 states, up 153,000 from June 2020 and up 63,000 from January. May cow numbers were revised up 4,000 head.

June output per cow averaged 1,994 pounds, up 26 pounds or 1.3% from 2020.

California milk was up 103 million pounds or 3.1% from a year ago, thanks to a 60-pound gain per cow. Cow numbers mirrored those a year ago. Wisconsin was up 73 million pounds or 2.8%, on a 30-pound gain per cow and 17,000 more cows.

Idaho was up 3.6%, on 14,000 more cows and 30 pounds more per cow. Michigan was up 4%, on 17,000 more cows. Output per cow was unchanged.

Minnesota was up 3.2%, despite a drop of 25 pounds per cow, but the additional 20,000 cows made up the difference. New Mexico was up 4.3%, on a 90-pound gain per cow, but cow numbers were down 1,000 head.

New York produced 3.1% more milk than a year ago, thanks to a 50-pound gain per cow and 4,000 more cows.

Oregon was up 0.5% on 2,000 more cows but output per cow was down 20 pounds. Pennsylvania was down 1.2%, on a drop of 7,000 cows, and output per cow was only up 5 pounds.

South Dakota again had the biggest gain, up 14.7%, on 20,000 more cows, though output per cow was unchanged. Second place went to Indiana, up 8.3%, thanks to 16,000 more cows milked. Output per cow was down 10 pounds. Texas was up 7.0%, inspired by 34,000 more cows and a 25-pound gain per cow.

Washington state had the second largest decline of the five states showing a loss, second only to Virginia and down 2.7%, despite a 35-pound gain per cow. Cow numbers were down 3,000.

StoneX Dairy points out in its July 22 Early Morning Update that solids content is still running strong with fat and protein up 1.3% from last year.

Dairy culling up

Dairy cow culling picked up in June and topped that of a year ago. The USDA’s latest Livestock Slaughter report shows an estimated 237,500 head were sent to slaughter under federal inspection, up 14,100 head from May and 10,500 or 4.6% above June 2020.

Culling in the first half of the year totaled 1.56 million head, down 29,100 or 1.8% from the same period a year ago.

A lot of butter

Growing U.S. butter stocks remain a concern, though the growth slowed some in June. The Agriculture Department’s latest Cold Storage report showed the June 30 butter inventory at a whopping 414.5 million pounds, up 2.6 million pounds or 0.6% from May, which was revised up 10.1 million pounds, and was a weighty 52 million pounds or 14.4% above June 30, 2020.

We’ll learn what June butter output looked like in the next Dairy Products report issued Aug. 4.

American type cheese fell to 809.4 million pounds, down 18.3 million or 2.2% from the May level, which was revised down 3 million pounds from last month’s report, but stocks were up 16.4 million pounds or 2.1% from a year ago.

The “other” cheese category stocks slipped to 603.0 million pounds, down 5.5 million pounds or 0.9% from May, but 4.1 million or 0.7% above a year ago. Revisions reduced the May inventory by 4.3 million pounds.

The total cheese inventory fell to 1.435 billion pounds, down 23.1 million pounds or 1.6% from May, but 19 million pounds or 1.3% above a year ago.

Prices oscillating

CME dairy prices saw ups and downs last week, though perhaps encouraged some by the June Milk Production and Cold Storage reports. The Cheddar blocks fell to $1.5225 per pound last Wednesday, lowest since June 28, but rallied to close Friday at $1.5850, still down 3 cents on the week and 95.50 cents below a year ago.

The barrels fell to $1.3725 last Wednesday, lowest since Aug. 24, 2020, but finished Friday at $1.4025, 3.75 cents lower on the week, $1.0475 below a year ago, and 18.15 cents below the blocks. The week’s trading consisted of 1 car of block and 35 of barrel.

Monday saw the blocks add 4.25 cents and they were up 0.75 cents Tuesday, hitting $1.6350 per pound.

The barrels were up 1.50 cents Monday but rolled 0.25 cents lower Tuesday, to $1.4150, 22 cents below the blocks.

Midwestern cheesemakers told Dairy Market News that market tones were not matching demand and their respective inventory levels and a number say customer interests were strengthening. Barrel producers said they are slightly over-committed and told customers that availability into August would be more limited.

Western retail and food service cheese demand is holding steady, as are exports, thanks to the lower prices. Contacts reported a need to move product quickly, as warehouse space is limited. Delays have led to a stock buildup, thanks to a shortage of truck drivers, limited shipping supplies, and port congestion.

Cash butter saw its Friday finish at $1.6950 per pound, up 1.75 cents, but 3.50 cents below a year ago, with 20 carloads exchanging hands on the week.

Monday’s butter lost 4 cents and proceeded to lose another 1.50 cents Tuesday, slipping to $1.64, lowest CME price since March 1.

July butter sales softened, according to some Midwest producers. June was a better month for food service sales than July, while June and July retail interests were seasonally quiet. Cream was more available last week, according to DMN.

Cream was a little lighter in the West though persistent hauler shortages made availability seem even tighter. Butter production is seasonally active, depending on cream supplies. Some plants reported that production already exceeded 2020 output. Retail sales are steady to slightly higher. Food service demand was also seeing an uptick as fine dining establishments return to normal operation.

Grade A nonfat dry milk fell to $1.23 per pound last Tuesday but closed the week at $1.2525, unchanged on the week, but 26.25 cents above a year ago on 10 sales.

Traders inched the powder up a quarter-cent Monday but backed it down a half-cent Tuesday, to $1.25 per pound.

Dry whey lost a half-cent last Wednesday, gained it back Thursday, and closed Friday at 53.75 cents per pound, 19.75 cents above a year ago, on 3 sales for the week.

The whey gained 0.75 cents Monday and stayed there Tuesday at 53 cents per pound.

Class I down

The August Federal order Class I base milk price is $16.90 per hundredweight, down 52 cents from July, $2.88 below August 2020, and the lowest Class I since April. It equates to $1.45 per gallon, down from $1.70 a year ago.

The eight-month average stands at $16.39, down from $16.42 at this time a year ago and compares to $16.34 in 2019.

THE Dairy Industry Code of Conduct has brought about a “significant culture change” within the dairy sector and helped increase competition at the farmgate, according to Australian Competition & Consumer Commission deputy chair Mick Keogh.

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