Dairy prices started April with some hesitation. The block Cheddar closed the first Friday of the month at $1.66 per pound, up 1 1/2-cents on the week and 5 3/4-cents above a year ago. The barrels closed at $1.5750, down 2 3/4-cents but 12 1/2-cents above a year ago.

The blocks gave up a penny and a half Monday while the barrels inched a quarter-cent higher. The blocks gained a penny Tuesday, climbing to $1.6550. The barrels were up a penny and a half, and hit $1.5925.

Central cheesemakers tell Dairy Market News that demand is edging up due to seasonal shifts and the upcoming holidays. Some have said winter buying was particularly dismal in recent months and winter weather in the Midwest and Northeast was far from complementary to retail/restaurant cheese buying.

Cheese production is steady to increasing, meeting newly increasing demand. There is still plenty of cheese in the country but a number of Midwestern contacts report that inventories have been held in check with lower production during fall and winter and many view the markets with a “somewhat bullish lens.”

Cheese offers in the West are abundant as manufacturers have a lot in stock. Cheese processing is stable to increasing due to strong milk output but it seems like there have been some shifts in the types of cheese produced. A few manufacturers are refraining from making too much cheese as they try to control supplies. Export and domestic sales are a bit higher.

Butter closed Friday at $2.27 per pound, up 1 1/2-cents on the week but 1 3/4-cents below a year ago. Monday’s butter was unchanged, then dropped 1 1/4-cents Tuesday, to $2.2575.

Some Central butter plant managers report cream availability has tapered down noticeably while others continue to see sufficient to plentiful amounts. Some contacts are increasing organic production, as they receive organic cream from outside the region. Butter demand is strong and the markets remain “interminably steady,” says DMN.

Western butter demand is also strong as spring baking and holidays are around the corner. Butter makers are actively churning cream but a few suggest that cream has tightened greatly over the last couple weeks as Class II processors have started ramping up production.

Grade A nonfat dry milk closed Friday at 98 3/4-cents per pound, up 2 1/2-cents on the week and 26 cents above a year ago.

The powder was unchanged Monday and Tuesday.

Spot dry whey saw a Friday close at 34 1/2-cents per pound, 2 1/4-cents higher on the week and 2 1/2-cents above a year ago.

The whey gained three-quarters Monday and stayed there Tuesday at 35 1/4-cents per pound.

Benchmark jumps 

The USDA announced the March Federal order Class III benchmark milk price at $15.04 per hundredweight, up $1.15 from February, 82 cents above March 2018, and the highest Class III since October 2018. It equates to $1.29 per gallon, up from $1.19 in February and $1.22 a year ago.

The three-month average is at $14.30, up from $13.87 a year ago but compares to $16.49 in 2017.

Monday’s Class III futures settlements portended an April price at $15.86; May at $15.72; and June at $15.81, with a peak at $16.55 in September.

The March Class IV price is $15.71, down 15 cents from February but $2.67 above a year ago, and the highest March Class IV since 2014. Its three-month average stands at $15.68, up from $13.01 a year ago and $15.37 in 2017.

Projection lowered

The Agriculture Department lowered its 2019 milk production estimate for the fifth consecutive month in its World Agricultural Supply and Demand Estimates report issued Tuesday “as higher milk cow numbers are more than offset by lower expected growth in milk per cow for the year.”

2019 production and marketings are now estimated at 219.5 billion and 218.6 billion pounds, respectively, down 200 million pounds on both from last month’s estimate. If realized, 2019 production and marketings would be up just 1.9 billion pounds, or 0.9% from 2018.

The Class III milk price forecast was raised on a higher cheese price forecast. Department bean counters expect a 2019 average of $15.10-$15.60 per hundredweight, up 15 cents from last month’s projection, and compares to $14.61 in 2018 and $16.17 in 2017.

The Class IV average was reduced on lower nonfat dry milk and butter price forecasts. It is projected to range between $15.75 and $16.35, down a dime on the high end from last month’s estimate, and compares to $14.23 in 2018 and $15.16 in 2017.

Milk moves

Preliminary data showed February 50-State milk output at 17.0 billion pounds, up 0.2% from a year ago and the latest Dairy Products report shows that less milk went to butter-powder and more to cheese. And cheese output moved from Cheddar and American-style to Italian, specifically, Mozzarella.

February cheese output totaled 991.4 million pounds, down 9.7% from January and 0.5% above February 2018. Year-to-date cheese output hit 2.1 billion pounds, up 0.3% from a year ago.

Wisconsin contributed 258.9 million pounds of that total, down 6.4% from January and 1.6% below a year ago. California produced 201.2 million pounds, down 5.9% from January but 1.2% above a year ago. Idaho provided 71.6 million pounds, down 17.4% from January and 1.1% below a year ago.

Italian cheese totaled 440.5 million pounds, down 8.3% from January but 3.3% above a year ago. YTD Italian stands at 920.6 million pounds, up 2.2%. Mozzarella, at 348.1 million pounds, was up 6.3% from a year ago, with YTD at 727.7 million pounds, up 4.8%.

American type cheese totaled 393.6 million pounds, down 10.4% from January and 0.9% below a year ago, with YTD at 832.9 million pounds, up 0.2%.

Cheddar, the cheese traded at the CME, totaled 280.6 million pounds, down 42.6 million pounds or 15.2% from January and 12.7 million pounds or 4.5% below a year ago. YTD Cheddar hit 603.8 million, down 1.3%.

U.S. churns produced 165.2 million pounds of butter, down 24.4 million pounds or 12.9% from January and 4.9 million pounds or 3.0% below a year ago. YTD butter is at 354.9 million pounds, up 0.8%.

Dry whey totaled 74.9 million pounds, down 16.4%. Dry whey for human consumption totaled 73.7 million pounds, down 7.6% from January and 17.1% below a year ago. YTD whey output is down 13.2%. Stocks totaled 85.9 million pounds, up 9.2% from January but 1.1% below those a year ago.

Nonfat dry milk production totaled 153.7 million pounds, down 11% from January and 2.6% above a year ago. YTD powder is at 326.4 million pounds, up 2.6%. Stocks climbed to 308.9 million pounds, up 22.5 million pounds or 7.9% from January and are 10.5 million pounds or 3.5% above the 2018 level.

Skim milk powder totaled 35.8 million pounds, down 9.9% from January and 4.8% below a year ago. YTD skim hit 75.6 million pounds, down 9.3% from a year ago.

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

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