The 2022 milk production estimate was raised for the second month in a row in the USDA’s World Agricultural Supply and Demand Estimates report (WASDE), citing higher milk cow inventories that will more than offset slower growth in milk per cow. It also gave us the first 2023 projections.

2022 production and marketings were estimated at 226.7 billion and 225.6 billion pounds, respectively, up 400 million pounds on production and 300 million on marketings. If realized output would be up 400 million pounds, or 0.2% from 2021.

2023 production and marketings were estimated at 229.5 billion and 228.4 billion pounds, respectively. If realized, 2023 production would be up 2.8 billion pounds, or 1.2% from 2022. The increase will be driven by gains in milk per cow, says the WASDE, with the milk cow herd expected to average close to 2022 levels.

Price forecasts for 2022 cheese and butter were raised from the previous month, based on tighter stocks and firm demand. Nonfat dry milk prices were raised fractionally while whey prices were lowered.

The 2022 cheese price average was projected at $2.1750 per pound, up 2.50 cents from last month’s estimate, and compares to the 2021 average of $1.6755. The 2023 average was estimated at $2.04 per pound.

Butter was projected at $2.65 per pound for 2022, up a penny from a month ago, and compares to $1.7325 in 2021. The 2023 average was estimated at $2.35.

Nonfat dry milk is projected to average $1.7150 per pound for 2022 and $1.58 for 2023. Dry whey was projected to average 65.50 cents per pound in 2022 and 52 cents per pound in 2023.

The 2022 Class III milk price average is projected at $22.75 per hundredweight, unchanged from a month ago, compares to $17.08 in 2021, and estimated to average $20.50 in 2023.

The Class IV is expected to average $23.80 in 2022, down 25 cents from a month ago, and compares to $16.09 in 2021. The 2023 average is at $21.40.

GDT down 2.9%

Tuesday’s Global Dairy Trade auction saw its fifth consecutive decline, with the weighted average down 2.9%, following the 8.5% drop on May 3.

Event 308 was led lower by whole milk powder dropping 4.9%, following the 6.5% decline on May 3. Skim milk powder was down just 0.6%, after dropping 6.5%.

GDT butter was down 1%, after leading the losses last time with a 12.5% plunge. Anhydrous milkfat inched up 0.6%, after a 12.1% plunge last time, and Cheddar was down 0.1%, after dropping 8.6% last time.

StoneX Dairy Group says the GDT 80% butterfat butter price equates to $2.5446 per pound U.S., down 2.5 cents after dropping 36.9 cents in the last event, and compares to CME butter which closed Tuesday at a pricy $2.77.

GDT Cheddar, at $2.5559, was down 0.8 cents after losing 24.2 cents last time, and compares to Tuesday’s CME block Cheddar at a bargain $2.37. GDT skim milk powder averaged $1.8669 per pound, down from $1.8731. Whole milk powder averaged $1.7845 per pound. CME Grade A nonfat dry milk closed Tuesday at $1.7450 per pound.

Fluid sales down 3.4%

Fluid milk sales took another hit. The latest data shows sales of packaged fluid products in March at 3.8 billion pounds, down 3.4% from Mar. 2021.

Conventional product sales totaled 3.5 billion pounds, down 3.3% from a year ago. Organic products, at 253 million pounds, were down 4.3%, and represented 6.7% of total sales for the month.

Total packaged fluid sales for the first three months of 2022 amounted to 11.1 billion pounds, down 2.7% from 2021. Conventional product sales totaled 10.4 billion pounds, down 2.5%. Organic products, at 724 million, were down 4.6%, and represented 6.5% of total milk sales for the period.

CME prices searching

CME block Cheddar sank to $2.2625 per pound last Tuesday, lowest since March 31, but rallied Wednesday and closed “Friday the 13th” at $2.3075, still down 4.25 cents on the week, third week of decline, but 58.25 cents above a year ago.

The barrels fell to $2.34 per pound last Tuesday but finished Friday at $2.3950, up 1.50 cents on the week and 66.50 cents above a year ago. CME sales numbered 14 blocks and only 2 barrels last week.

The blocks jumped 5.75 cents Monday and added 0.50 cents Tuesday, hitting $2.37, as traders awaited Wednesday’s April Milk Production report.

The barrels were up 2.25 cents Monday and added 3.25 cents Tuesday, hitting $2.45 per pound, highest CME price since Nov. 5, 2020, and 8 cents above the blocks.

Spot milk trading was busier at Midwest cheese plants last week, according to Dairy Market News. Class I intakes have slowed as schools begin to curb orders and seasonal milking patterns are putting more milk into the market. It’s needed as cheese demand, particularly in the upper Midwest, remains somewhat strong.

Western contacts report that cheese export demand remains strong. Retail sales reportedly slid lower but was countered by an increase in food service demand. Milk is available and cheese producers are running busy schedules but labor shortages and delayed deliveries of production supplies continue to cause some plants to run below capacity.

Cash butter dropped to $2.61 per pound last Tuesday, then reversed direction and headed to a Friday finish at $2.7050, up 6.50 cents on the week and 83 cents above a year ago. There were 18 carloads that found new homes on the week.

Monday’s butter gained 3.50 cents and added 3 more cents Tuesday, hitting $2.77, highest since April 13.

Food service butter demand remains steady while retail orders are in a seasonally quieter phase, says DMN. Plant managers continue to say they are using this time to churn in preparation for fall demand.

Western contacts report that cream markets are steady. Cream inventories are available, though ice cream makers are buying cream in anticipation of warmer weather. Contacts report they are running busy schedules, trying to build inventory, but labor shortages and delayed deliveries of production supplies also continues to prevent running at capacity.

Grade A nonfat dry milk fell to $1.7225 Wednesday but closed Friday at $1.73, down a penny on the week and 43 cents above a year ago, on 6 sales.

The powder inched up a half-cent Monday and gained a penny Tuesday, climbing to $1.7450.

Dry whey closed Friday at 53.25 cents per pound, down 5.25 cents on the week, and 10.75 cents below a year ago, on 9 sales for the week at the CME.

Monday’s whey dropped 4.75 cents, to 48.50 cents per pound, lowest since Aug. 4, 2021, but regained 1.25 cents Tuesday, climbing back to 49.75 cents per pound.

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