U.S. milk production fell below that of a year ago for the first time in six years.
The USDA’s preliminary 50-state data put March output at 18.9 billion pounds, down 0.4% from March 2018. Output in the top 23 producing states was 17.8 billion pounds, down 0.1%, as weather raised havoc throughout the country.
Revisions lowered the original February total by 37 million pounds, to 16.0 billion, up just 0.4% from February 2018.
March cow numbers in the 50 states totaled 9.34 million head, down 10,000 from February, 86,000 below a year ago, and the ninth consecutive month that cow numbers were below a year ago since May 2016.
However, output per cow managed to climb to 2,024 pounds, up 10 pounds from a year ago and the 41st consecutive month of gain.
California production was up 0.7% from a year ago, thanks to a 25-pound gain per cow outweighing 9,000 fewer cows. Wisconsin was up just 0.4%, on a 15-pound gain per cow, but cow numbers were down 4,000 head.
New York was up 2.3%, thanks to a 40-pound gain per cow and 2,000 more cows.
Idaho was up 1.4 percent, on 9,000 more cows. Output per cow was unchanged.
Pennsylvania was down for the 13th consecutive month, dropping 66 million pounds or 6.9% from a year ago, due to 29,000 fewer cows milked and 25 pounds less per cow. Minnesota was up 0.5%, on a 25-pound gain per cow offsetting 4,000 fewer cows.
Michigan bested a year ago by 0.4%, thanks to a 15-pound gain per cow offsetting 1,000 fewer cows. New Mexico was down 3.9%, on a 10-pound drop per cow and 12,000 fewer cows milked.
Texas was up 65 million pounds or 5.8% from a year ago, thanks to 27,000 more cows and a 15-pound gain per cow.
Washington state inched up 0.4%, on a 15-pound gain per cow outweighing a drop of 4,000 cows.
The Agriculture Department’s latest Cold Storage report shows March 31 butter stocks at 270.2 million pounds, up 26.7 million pounds or 11.0% from February but 3.8 million pounds or 1.4% below those in March 2018.
American type cheese, which includes Cheddar, totaled 784.6 million pounds, up 1.4 million pounds from February but 18 million or 2.3% above a year ago.
The other cheese category climbed to 565.9 million pounds, up 12.9 million pounds or 2.3% from February and 36.9 million or 7.0% above a year ago.
The total cheese inventory stood at 1.38 billion pounds, up 14.6 million pounds or 1% from February, 57.2 million pounds or 4.3% above a year ago, and the 53rd consecutive month stocks topped a year ago.
Cash dairy prices were mixed in the Good Friday holiday-shortened week as traders absorbed Tuesday’s Global Dairy Trade auction and anticipated Monday’s March Milk Production report.
The Cheddar blocks closed Thursday at $1.6675 per pound, up 2 1/4-cents on the week and 6 1/2-cents above a year ago. The barrels finished at $1.5150, down a disappointing 10 1/4-cents on the week but 1 1/2-cents above a year ago.
The blocks ticked up three-quarters Monday, then backed down a quarter-cent Tuesday, to $1.6725.
The barrels regained 6 cents Monday but stayed there Tuesday at $1.5750, a higher-than-normal 9 3/4-cents below the blocks.
Cheese contacts continue to report bullish demand in the Midwest, according to Dairy Market News. Curd, mozzarella and specialty cheesemakers say there has been a seasonal push from buyers.
Midwest contacts report that more and more dairy farms are calling it quits and question what that means for upcoming milk availability.
Western cheese output remains active with plenty of milk going to the vats. Some processors are attempting to control massive growth in supplies through planned output reduction. With demand not as good as they want and more milk available, cheese production control seems one of the best ways to manage inventories.
Cheese sales are a bit mixed and the tenor of the western market is “somewhat unsettled.”
Cash butter saw a Thursday finish at $2.2825 per pound, up 2 1/2-cents on the week but 3 1/4-cents below a year ago.
The Monday butter lost 1 1/4-cents and shed three-quarters Tuesday, melting down to $2.2625.
Butter makers are still receiving sufficient cream at similar prices to the previous week but do not expect this to last much longer as cream has tightened recently and is expected to continue this path. Retail sales are down somewhat, as late holiday orders ebbed but demand is up on average, year over year.
Western butter contacts relay that production levels are stable. They are getting offers of extra cream, but so far, it has not been the flood that is sometimes expected at this point in the year but butter stocks are building somewhat.
Grade A nonfat dry milk closed Thursday at $1.00 per pound, up 1 1/4-cents on the week, and 19 1/2-cents above a year ago.
The powder was unchanged Monday but gained 1 1/4-cents Tuesday, hitting $1.0125 per pound, highest since Jan. 29.
Spot dry whey closed last week at 34 cents per pound, down 1 3/4-cents but 2 1/2-cents above a year ago.
The whey inched a quarter-cent lower both Monday and Tuesday, slipping to 33 1/2-cents per pound.
Class I up
May Class I milk prices will rise, driven by strength in cheese. The Agriculture Department announced the May Federal order Class I base price at $16.42 per hundredweight, up 66 cents from April, $1.98 above May 2018, and the highest Class I price since December 2017. This is the price that each Federal order adds its Class I differential to, to determine its Class I price.
The five-month Class I average is at $15.72, up from $14.32 a year ago, but compares to $16.47 in 2017.
This is the first Federal order Class I price not using the “higher of” value of milk that goes to cheese or butter-powder, in determining the Class I value, a practice for nearly 20 years, but one that put processors at a disadvantage.
The Milk Producers Council’s Geoff VandenHeuvel explains in his April 12 newsletter the reasons for the problem and how processors and producers agreed to solve the issue.
Fluid sales down
Fluid milk sales saw another month of declining sales, down 1.9% from February 2018, following a January drop of just 0.6%. The latest data puts February sales at 3.6 billion pounds, down 1.9% from February 2018.
Conventional product sales totaled 3.45 billion pounds, down 1.8% from a year ago. Organic products, at 196 million pounds, were down 4.3% and represented about 5.4% of total sales for the month.
Whole milk sales continue to move higher and totaled 1.16 billion pounds, up 1.0% from a year ago and made up 31.7% of total fluid sales in the month. Skim milk sales, at 275 million pounds, were down 9.3% and made up just 7.5% of total milk sales.
Total packaged fluid milk sales for the two month period totaled 7.9 billion pounds, down 1.2% from a year ago. Conventional products year-to-date totaled 7.4 billion pounds, down 1.1%.
Organic products, at 429 million pounds, were down 2.7% and represented about 5.5% of total fluid milk sales for the period.