U.S. milk production continues to limp. The Agriculture Department’s latest Milk Production report shows preliminary June output at 18.23 billion pounds, down 0.3% from June 2018.

Output in the 24 top producing states hit 17.3 billion pounds, up 0.1%. Revisions added 9 million pounds to the original May total, now put at 19.06 billion pounds, down 0.4% from May 2018.

June cow numbers in the 50 states totaled 9.32 million head, down 10,000 from May and 91,000 head below a year ago. Output per cow averaged 1,955 pounds, up 12 pounds from a year ago.

Milk output in the April-June quarter was down 0.1% from a year ago. The average number of milk cows was down 15,000 head from the January to March quarter and 89,000 less than the April-June quarter a year ago.

California cows produced 1.2% more milk than a year ago, thanks to a 30-pound gain per cow offsetting the loss of 7,000 cows. Wisconsin output was down 0.5%, on 6,000 fewer cows. Output per cow was unchanged.

Idaho was up 2.0% on 9,000 more cows and a 10-pound gain per cow. New York was up 0.2%, thanks to 4,000 additional cows however output per cow was down 10 pounds.

Pennsylvania saw its 16th consecutive month that milk output was below a year ago, down 58 million pounds or 6.5%, due to 31,000 fewer cows milked and 10 pounds less per cow.

Minnesota was up 0.8%, despite a drop of 6,000 cows. Output per cow was up 40 pounds.

Michigan was up 2.2% on a 40-pound gain per cow and 2,000 more cows. New Mexico was down 2.8%, on 11,000 fewer cows.

Output per cow was up 10 pounds. Texas was up 5.6% on 29,000 more cows and a 5-pound gain per cow.

Washington state was off 0.5%, on 6,000 fewer cows. Output per cow was unchanged from a year ago.

Stocks below 2018

U.S. butter stocks grew in June but were still below those a year ago, according to the USDA’s latest Cold Storage report. The butter inventory climbed to a surprising 327.76 million pounds, up 13.9 million pounds or 4.4% from May but were 8.9 million pounds or 2.6% below June 2018.

Total cheese stocks slipped to 1.381 billion pounds, down 7.1 million pounds or 0.5% from May and 7.1 million or 0.5% below those in June 2018.

American stocks totaled 784.95 million pounds, down 2.3 million pounds, down 0.3% from May, and 15.4 million pounds or 1.9% below a year ago.

Stocks in the other cheese category slipped to 569.2 million pounds, down 7.4 million pounds or 0.8% from May but were up 12.2 million pounds or 2.2% from a year ago.

HighGround Dairy points out, “For the second consecutive month, and against historical expectations, U.S. total cheese stocks continued to move lower into June, marking the first time on record from the USDA that both May and June experienced a draw down in cheese stocks.”

HGD also reports that “fat shortages are being fulfilled by strong imports, a trend that is not expected to slow, tempering (butter) prices nearby ahead of the holiday demand spike.”

Prices slip

CME block Cheddar closed last week at $1.78 per pound, down a half-cent on the week and the third consecutive week of decline, but was 26 cents above a year ago. The barrels saw a Friday close at $1.7050, down 3 1/2-cents, but 43 1/2-cents above a year ago; 28 cars of barrel were the only cheese sold last week at the CME.

Traders, while anticipating Monday afternoon’s June Milk Production and Cold Storage reports, took the blocks up 1 1/4-cents Monday morning and added 3 3/4-cents Tuesday, hitting $1.83.

The barrels gained three-quarters Monday and a half-cent Tuesday, inching to $1.7175, but the spread grew to 11 1/4-cents.

Dairy Market News reported that a growing number of Midwest cheese producers are concerned about farm milk availability. Offers are down due to the heat as farmers report, in some cases, dramatic milk-per-cow declines. Cheese sales reports have been mostly positive.

Western cheesemakers report plenty of milk is available and production is active. And, while the perception of demand may not be all that was hoped for, it is enough to keep inventories in check and buyers say they do not have trouble getting the cheese they need. Retail demand is steady, but not extraordinary. Exports have perked up with lower U.S. prices and export assistance programs.

Cash butter finished Friday at $2.3975, down 1 1/2-cents on the week but 14 3/4-cents above a year ago, on a hefty 51 sales for the week.

Monday’s butter was down 2 1/4-cents and Tuesday’s trading took it down another 1 1/2-cents, to $2.36, lowest since June 4.

Some Midwestern butter plants scheduled downtime for maintenance last week. This is “timely,” says DMN, “as cream multiples on the spot market have become fiscally beyond their reach. Ice cream production increases have naturally merged with increasing temperatures, which have begun to noticeably affect farm milk output.”

Western butter markets are mixed. Retail sales are variable from one manufacturer to another. While some commercial demands are sluggish, others are good. Butter output has slowed because more cream is moving to ice cream and other Class II production and a number of butter makers have stopped producing butter, opting to sell their cream. Worldwide, butterfat is available at more affordable prices compared to the U.S.

Grade A nonfat dry milk ended the week at $1.0075 per pound, down 2 cents and the lowest CME price since April 22, but is still 22 1/4-cents above a year ago. 3 cars found new homes on the week.

The powder was unchanged Monday but regained a quarter-cent Tuesday, rising to $1.01.

Cash dry whey closed Friday at 34 cents per pound, up 1 3/4-cents on the week but 8 cents below a year ago.

The whey inched up a quarter-cent both Monday and Tuesday, hitting 34 1/2-cents per pound.

Class I highest since 2015

The August Federal order Class I base milk price is $17.89 per hundredweight, up 71 cents from July, $3.74 above August 2018, and the highest since January 2015’s $18.58.

It equates to $1.54 per gallon, up from $1.22 a year ago. The 2019 Class I average stands at $16.34, up from $14.54 at this time a year ago and 3 cents shy of the 2017 average.

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

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