MILK
It was anticipated that milk production would be lower than a year ago and cow numbers would be lower than in July. Milk production was below last year's but not as much as expected. August milk production was down 0.3% from a year ago at 18.2 billion pounds in the top 24 states. Milk production per cow was only 2 pounds below July 2022.
The real surprise was that cow numbers increased 1,000 head from July. Milk production in the U.S. declined 0.2% from July 2022 with milk per cow averaging 2,021 pounds, just 1 pound below a year ago. Cow numbers were unchanged from July. The expectation was for milk production to see a greater decrease due to heavier culling and hot weather prevalent in many areas. But to see cow numbers unchanged in the country compared to July was a real surprise.
There seem to have been a lot of replacements available to take the spot of cull cows. Culling may also have slowed due to the outlook for better milk prices through the end of the year. This is a bearish report as the upside price potential might be limited.
There are eight states of the top 24 that showed production declines. New Mexico was down 8%; Kansas declined 4.3%; California was down 3.7%; Colorado declined 3.5%; Oregon and Texas were down 3.2 %; Minnesota was down 0.7%; and Utah was down 0.5%. The greatest gain was seen in South Dakota with an increase of 6% followed by New York up 3.8%. Michigan increased 3.7% with Iowa up 3.2% and Georgia up 3.1%. All the other gains were 3% or less.
AVERAGE CLASS III PRICES
| 3 Month: | $18.06 |
| 6 Month: | $18.10 |
| 9 Month: | $18.18 |
| 12 Month: | $18.30 |
CHEESE
The weakness of barrel cheese struck a blow to the futures market. Futures for the rest of this year fell back to levels of over three weeks ago. Buyers are holding back waiting for prices to reach a level at which sellers will not want to offer cheese any lower. With ample cheese supply, there is little concern over tightness through the end of the year.
BUTTER
The strength of butter today bodes well for the market as buyers continue to support it even though exports are slow and inventory is higher than a year ago. The price might be poised to exceed last week's high which would put the price back to the highest level since December. The current fresh supply is being supplemented by inventory to meet demand.
