There are more reports that plants are full and cannot handle any more. Growing discounts are being seen with a representative of one plant in the Upper Midwest indicating that one almost cannot give milk away. This may be a bit of an exaggeration, but it does indicate that milk production is strong and plant capacity less than sufficient to handle the supply.
Excess milk in the Midwest is being offered at $4 to $5 below class. Some contracts for milk are already being made into June at the same discount. Milk production in the West is already past its peak and is slowly declining as warmer weather increases.
April dairy-cattle slaughter totaled 242,800 head according to the U.S. Department of Agriculture. This is an increase of 13,000 head from a year earlier, but is 17,900 head less than March. For the week ending May 22, Cheddar blocks closed at $1.65, up 3 cents with 13 loads traded. Barrels settled at $1.62, down 0.25 cents with 19 loads traded. Butter fell 8.25 cents, closing at $1.89 with 13 loads traded. Grade A nonfat dry milk increased 0.25 cents, closing at 90 cents with 5 loads traded.
Cow numbers increase
April milk production increased 1.7 percent from a year ago according to USDA’s “Milk Production” report released during the week. It was the same increase for the top 23 states as well as U.S. production. March milk production was revised to an increase of 1.3 percent. Production per cow totaled 1,928 pounds in the top 23 states, an increase of 16 pounds. Cow numbers increased 1,000 head from March, with total cow numbers up 65,000 head from a year ago.
U.S. milk production per cow increased 19 pounds to a total of 1,911 pounds. South Dakota showed the greatest increase of 9.8 percent above a year ago. Kansas followed with an increase of 6.8 percent; Michigan increased 6.5 percent; Colorado gained 6.1 percent; Iowa increased 5.9 percent; Utah increased 5.6 percent; and Wisconsin was up 4.0 percent. All the other states with gains showed increases below 4.0 percent. There were three states showing losses. California was down 2.1 percent. New Mexico declined 1.4 percent and Oregon was down 0.9 percent.
Global Dairy Trade declines
Global Dairy Trade auction prices were mixed on the latest auction with the trade weighted average declining 2.2 percent. This is the fifth-consecutive decline of the weighted average. Anhydrous milk fat declined 4.8 percent to $3,337mt, or $151 per pound. Butter declined 3.2 percent to $2,911mt, or $1.32 per pound. Buttermilk powder increased 3.2 percent to $1,930mt, or $0.88 per pound. Cheddar cheese declined 7.1 percent to $2,745mt, or $1.25 per pound. Rennet Casein slipped 0.4 percent to $6,067mt, or $2.75 per pound. Skim-milk powder dropped 3.6 percent to $1,992mt, or $0.90 per pound. Whole-milk powder lost 0.5 percent to $2,390mt, or $1.08 per pound. Lactose traded up 0.9 percent to $580mt, or $0.26 per pound
April stocks increase
Cheese supply is growing as reported on USDA’s “Cold Storage” report. American cheese stocks increased 7.9 million pounds to a total supply of 639.5 million pounds. This is 1 percent higher than March and 1 percent below a year ago. Swiss cheese stocks declined 600,000 pounds to a total of 24.0 million pounds. This is 2 percent below March and 15 percent below a year ago. Stock of other cheese totaled 417.4 million pounds, an increase of 8.3 million pounds. This is up 2 percent from March and is 16 percent above a year ago. This put total cheese stocks at 1.081 billion pounds, up 15.6 million pounds. This is 1 percent above March and 4 percent above a year ago.
Butter stocks showed a large increase with inventory totaling 230.4 million pounds, up 46 million pounds. This is an increase of 25 percent from March and is 23 percent above a year ago. This is the highest inventory of butter since September 2013.
Agricultural Marketing Service prices
For the week ending May 16, Agricultural Marketing Service prices were higher. Prices for 40-pound cheddar blocks increased 1.4 cents to $1.63. The price for 500-pound barrels, adjusted to 38-percent moisture, averaged $1.67, up 0.1 cents. USDA grade AA butter averaged $1.88 for the week, up 5.9 cents. Nonfat dry milk averaged 95.6 cents, up 1.4 cents. Dry whey averaged 45.4 cents, up 1.8 cents.
Source: Agriview
