The Agriculture Department’s preliminary data reports February milk output hit 17.63 billion pounds, down 1.5% from February 2020.
However, February 2020 had an extra “Leap Day,” so adjusting for that, February output was actually up 2.0% from 2020. Output in the top 24 states was up 2.3%, when adjusted.
Revisions in January output were a big factor of interest in this report as January’s preliminary estimate was raised by 155 million pounds to 19.3 billion, up 2.4%, instead of the originally reported 1.6% increase.
February cow numbers were up for the eighth consecutive month, totaling 9.46 million head in the 50 states, up 3,000 from January’s count, which was revised up 5,000 head. The February herd was up 81,000 from February 2020.
February output per cow averaged 1,864 pounds, up 22 pounds or 1.2% from a year ago.
California’s February output was up 2.1% from a year ago, when adjusted, thanks to a 43-pound gain per cow, but with 3,000 fewer cows. The January total was revised up 94 million pounds, resulting in a 2.0% increase from January 2020, instead of the originally reported 0.7% decrease.
Wisconsin was up 3.2% in February on a 57-pound gain per cow but 2,000 fewer cows. January output was revised up 12 million pounds, resulting in a 3.6% gain from January 2020, instead of 3.1%.
Idaho was up 0.4%, despite a 2-pound drop per cow, but cow numbers were up 3,000 head. Revisions added 14 million pounds to Idaho’s January output, up 0.7% from a year ago, instead of the 0.3% drop originally reported.
Michigan was up 3.8%, on a 14-pound gain per cow and 13,000 more cows. Minnesota was up 5.8%, on a 51-pound gain per cow and 12,000 more cows. New Mexico inched 0.9% higher on 3,000 more cows with output per cow unchanged.
New York was up 1.7%, thanks to a 32-pound gain per cow. Cow numbers were unchanged.
Oregon was down 1.5% on 2,000 fewer cows but output per cow was up 2 pounds.
Pennsylvania was off 0.7%, on a drop of 8,000 cows, though output per cow was up 14 pounds.
Indiana again showed the biggest gain, up 10.4%, thanks to 17,000 more cows milked and a 14-pound per cow gain, but South Dakota was next again, up 9.6%, on 13,000 more cows and 7 more pounds per cow.
Texas was up 5.3%, on 30,000 more cows and 4 more pounds per cow, and that despite the weather challenges it endured.
Washington state was down 2.3% on 4,000 fewer cows, and an 18-pound drop per cow, as weather impacted that state as well.
Plenty to chew on
U.S. butter stocks climbed to 352.7 million pounds in February, up 20.8 million pounds or 6.3% from the January level, which was revised 3.5 million pounds higher than what was reported a month ago, and is a whopping 50.9 million pounds or 16.8% above Feb. 2020.
February was the 20th consecutive month that butter stocks topped those a year ago. However, the build was smaller than many expected. That is a positive but butter output remains strong and we’ll get more of that data in the February Dairy Products report issued April 1.
American type cheese hit 816 million pounds, up 6.9 million pounds or 0.9% from January, which was revised up 8.3 million pounds, and is 37.7 million or 4.8% above a year ago.
The “other” cheese category jumped to 597.5 million pounds, up 19.6 million pounds or 3.4% from January and 37.8 million or 6.8% above a year ago.
The total U.S. cheese inventory stood at 1.44 billion pounds, up 27.8 million pounds or 2.0% from January and 74.1 million pounds or 5.4% above a year ago.
February was the fourth month in a row that total cheese stocks grew and revisions for January amounted to 10 million pounds, which HighGround Dairy says is “a report-to-report build of 38 million pounds, a more bearish number than the initial February data would suggest.”
With spring flush upon us, cheese output will no doubt rise and could push stocks to record highs.
Dairy prices weaken
CME dairy prices were weaker last week, with the exception of dry whey, which set a record high. The Cheddar blocks closed Friday at $1.79 per pound, unchanged on the week but 4.75 cents below a year ago.
The barrels rolled downhill to a Friday close of $1.4525, down a dime on the week but still 2.25 cents above a year ago. There were 6 sales of block and 13 of barrel last week at the CME.
Monday’s traders took the blocks down 3 cents and dropped them another 4.50 cents Tuesday, to $1.7150, as they absorbed the Cold Storage and China’s import data.
The barrels dropped 1.50 cents Monday but inched back up 0.25 cents Tuesday to $1.44, 27.50 cents below the blocks.
Cheese demand reports are mixed, according to Dairy Market News, but Midwestern cheesemakers report busier tones with some having trouble keeping up with demand. Inventories vary but some are balanced to tight. Export interests, renewed school lunch programs, and spring holidays have helped to keep market tones somewhat bullish, says DMN.
Retail cheese demand in the West has been slowing slightly while demand at food service has been picking up. Buyers are finding plenty of cheese available. Mozzarella is moving well, says DMN, and with March Madness and other televised spring sports tournaments, some contacts expected demand to pick up as viewers purchase both restaurant carry out and grocery pizzas.
Cheese is being produced in high volumes in the West, with plenty of milk available. International interest lessened as prices increased. Port issues have improved but still are not back to normal, says DMN.
Cash butter saw its Friday finish at $1.6650 per pound, down a nickel on the week and 9 cents below a year ago, with only 5 sales reported for the week.
The butter was unchanged Monday but jumped 3.50 cents Tuesday, hitting $1.70.
Central cream is tightening but churning is ongoing. Cream is nearing the peak of affordability for churners, says DMN, but butter availability remains bountiful. Market tones have retained solidity, thanks to consecutive weeks of positive food service demand which is described as “reminiscent of pre-COVID buying,” according to DMN, plus interest continues from export customers.
Spring flush is early in the West, says DMN, and cream is plentiful. Ice cream makers are pulling more heavily on cream but butter makers have ample supplies. And, there is a lot of butter in the cooler. Export interest is strong, food service demand is showing growth as restrictions relax, and retail accounts are building inventory to prepare for the upcoming spring holiday advertised sales.
Grade A nonfat dry milk closed Friday at $1.1525 per pound, down 1.75 cents on the week but 16.50 cents above a year ago when the powder fell 6.50 cents. There were 11 sales last week.
Monday’s powder was down 1.25 cents but regained a penny Tuesday, climbing back to $1.15 per pound.
Spot dry whey continued its record-breaking trek in CME trading, with small daily gains last week, and reached a Friday summit at 61.25 cents per pound, up 2 cents on the week, 28.25 cents above a year ago, and approached NASS-surveyed price levels not seen since 2014. Only 2 sales were reported last week at the CME.
The whey was unchanged both Monday and Tuesday.
China buying
China was the proverbial “bull in the china shop” when it came to the latest import data, which traders and analysts are poring over. Reminiscent of buying in 2014, data were released this week for both January and February, and HighGround Dairy says January marked the highest volumes on record for any month.
Whole milk powder imports in the two months totaled 530.4 million pounds, up 7.4% from 2020. Skim milk powder totaled 192.5 million pounds, up 35.9%. Butter, at 46.2 million, was down 18.8%, but cheese totaled 67.7 million pounds, up 33.7%, year to date. Whey product imports amounted to 277.1 million pounds, up 49.2% from the same period a year ago.
The biggest leap was in whole milk powder from New Zealand, according to HGD, and fluid milk and cream from the EU-27. China frontloaded both whole and skim milk powder in January, as they typically do, says HGD, “but it came at an even stronger pace than usual given global shipping uncertainty.”
HGD says that remembering why food prices are inflated in China helps to project upcoming dairy demand and points to “food shortages due to disease and weather, alongside rising needs and a growing middle class. China does not have enough productive farmland, keeping food imports critical. If a pandemic could not stop China from recording record dairy imports in 2020, consumption trends throughout this year will be strong as well. The country is turning to protein of any sort, including dairy, to meet needs, driving global values higher in recent weeks where they will stay until Chinese buyers are satisfied with inventory levels,” HGD concludes.
Fluid sales drop
U.S. fluid milk sales have returned to “normal,” meaning they fell again. USDA’s latest data shows 3.9 billion pounds of packaged fluid products were sold in January, down 4.9% from Jan. 2020, and follows a 1.5% gain in December.
Conventional product sales totaled 3.6 billion pounds, down 5.7% from a year ago. Organic products, at 255 million pounds, were up 8.1%, and represented 6.6% of total sales for the month.
Whole milk sales totaled 1.3 billion pounds, down 2.7% from a year ago, and made up 33% of total fluid sales in January.
Skim milk sales, at 225 million pounds, were down 15.3% from a year ago.
Class I up 31 cents
The April Federal order Class I base milk price is $15.51 per hundredweight, up 31 cents from March, $1.13 below April 2020, and equates to about $1.33 per gallon, down from $1.43 a year ago.
