Capital Press

Milk prices are still languishing at or below cost of production, but national milk production grew by 1.7 percent in April over a year ago, according to the National Agricultural Statistics Service.

The national herd decreased by 155,000 cows, 3,000 higher than March, and production per cow increased 63 pounds.

Of the 23 major milk-producing states, 16 increased production in April over year-ago levels., including Washington (7.2 percent), Wisconsin (6.2 percent), Michigan (5.1 percent), and Idaho and Minnesota (3.3 percent).

California, the largest producer at 3.43 million pounds, was up slightly from a year ago, marking its first month of gain in 17 months.

The largest production declines were seen in Missouri (-7.6 percent), Colorado (-6.1 percent), and Arizona (-4.9 percent).

Dairymen sent 234,700 cows to slaughter in April, the highest April figure since 2003.

"However, this simply generated revenue to buy replacements or to put feed in front of home-grown heifers joining the milk herd," analyst Jerry Dryer said in his May 21 Dairy & Food Market Analyst report.

Seven states had more cows than a year ago, including Idaho (3,000), Washington (10,000) and Oregon (1,000). California had 5,000 head less, and cow numbers declined in 14 other states.

Total U.S. cow numbers have increased 14,000 January through April after falling by more than 250,000 head last year. In the first four months of 2010, cow numbers increased about 6,000 in Washington, 5,000 in New Mexico and 4,000 in Idaho. Meanwhile, California's herd continued to shrink, down 10,000 head.

In the first four months of the year, culling activity ran 3.2 percent (31,600 head) below a year ago, according to USDA's "Livestock Slaughter" report released last week.

Commercial cheese stocks remained at record levels at the end of April, according to USDA's "Cold Storage" report. On April 30, total cheese inventories were 1.012 billion pounds, up 8 percent from a year ago, while American cheese holdings were 614.0 million pounds, up 6 percent.

Nonetheless, CME cash cheese prices were $1.50 per pound for barrels and $1.47 per pound for blocks on April 21.

Holding cheese prices at current levels could prove difficult, Dryer said. The seasonal flush hasn't peaked in the Upper Midwest and the Northeast, and schools are starting to close.

"Manufacturers will have more than enough milk until near mid-June and handling supplies could get dicey with the Memorial Day holiday plant closures," he said.

On the bright side, Class III milk prices, at $12.92 per hundredweight, were up $2.14 cwt. in April over a year ago. And the Class I base price is showing improvement. At $15.28 cwt. for June, it's up $1.48 from May, and the highest price since January 2009.

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