U.S. milk production in March fell below that of a year ago for the first time in six years. The U.S. Department of Agriculture’s preliminary 50-state data put output at 18.9 billion pounds, down 0.4 percent from March 2018. Output in the top 23 producing states was at 17.8 billion pounds, down 0.1 percent, as weather raised havoc throughout the country. Revisions lowered the original February total by 37 million pounds, to 16 billion pounds, up 0.4 percent from February 2018.
March cow numbers in the 50 states totaled 9.34 million head, down 10,000 from February, 86,000 below a year ago and the ninth consecutive month that cow numbers were below a year ago since May 2016. Output per cow managed to climb to 2,024 pounds, however, up 10 pounds from a year ago and the 41st consecutive month of gain.
California production was up 0.7 percent from a year ago, thanks to a 25-pound gain per cow outweighing 9,000 fewer cows. Wisconsin was up just 0.4 percent on a 15-pound gain per cow, but cow numbers were down 4,000 head. Minnesota was up 0.5 percent on a 25-pound gain per cow offsetting 4,000 fewer cows. Michigan bested a year ago by 0.4 percent, thanks to a 15-pound gain per cow offsetting 1,000 fewer cows.
The Agriculture Department’s latest Cold Storage report shows March 31 butter stocks totaled 270.2 million pounds, up 26.7 million pounds, or 11 percent, from February but 3.8 million pounds, or 1.4 percent, below those in March 2018.
American type cheese, which includes Cheddar, totaled 784.6 million pounds, up 1.4 million pounds from February but 18 million, or 2.3 percent, above a year ago. The other cheese category climbed to 565.9 million pounds, up 12.9 million pounds, or 2.3 percent, from February and 36.9 million, or 7 percent, above a year ago.
The total cheese inventory stood at 1.38 billion pounds, up 14.6 million pounds, or 1 percent, from February and 57.2 million pounds, or 4.3 percent, above a year ago and the 53rd consecutive month stocks topped a year ago.
FC Stone stated in its April 23 Early Morning Update: “The March Milk Production number appears to garner more attention than the Cold Storage report as market participants will want to see how April inventory numbers stack up with Easter falling 20 days later this year than 2018. We’ll also need to get a look at what overall product production looked like for March, which we won’t see until the first week of May.”
There was good news on the dairy export front, albeit a bit old, from the U.S. Dairy Export Council, as improved cheese shipments highlighted export performance in February. Cheese exports totaled 32,515 tons, up 16 percent from the prior year. On a daily-average basis, it was the second-best month ever, falling just short of the record achieved in March 2014.
Sales of cheese to South Korea were the most in nearly four years at 7,154 tons, up 71 percent. Exporters also posted gains in sales to almost every other top market, including Mexico, up 9 percent; Japan, up 18 percent; Australia, up 8 percent; Southeast Asia, up 41 percent; and Central America, up 24 percent.
Speaking in the April 29 Dairy Radio Now broadcast, HighGround Dairy’s Lucas Fuess says the strong cheese exports to Mexico were surprising in view of the current tariff situation.
USDEC say “exports of fluid milk and cream were up 30 percent, reaching a 26-month high (daily-average basis) of 10.2 million liters. Butterfat, up 34 percent, and whole milk powder, up 64 percent, also posted increases, albeit on small volumes.”
Overall, suppliers shipped 160,457 tons of milk powders, cheese, butterfat, whey products and lactose in February, up from the previous three months and good for the second highest February volume ever but still down 14 percent from the strong performance of February 2018. Total U.S. exports were worth $468.2 million, up 3 percent, year-over-year.
Totals were pulled down, however, by continued weakness in whey and other exports to China due to retaliatory tariffs in place since last summer, plus the spread of African Swine Fever. Overall exports of nonfat dry milk, skim milk powder and lactose also lagged prior-year levels.
U.S. whey exports totaled 32,818 tons, down 29 percent from last year. Shipments to China were just 8,529 tons, down 58 percent and the lowest since February 2011. Sales to Japan were down 45 percent as new trade agreements that benefit U.S. competitors came into force, cutting U.S. competitiveness. But U.S. exporters increased whey sales to Mexico by 32 percent and South Korea up 72 percent.
Exports of NDM/SMP totaled 55,164 tons, down 17 percent. Volumes to Mexico were flat, but shipments to Southeast Asia were down 11 percent; China, down 78 percent; Peru, down 83 percent; and the Middle East/North Africa region were down 85 percent.
HGD’s Fuess says whey looks the least promising in terms of price recovery in the near term. He says that while the continued success in U.S. dairy exports is good, he believes the lower milk production prospect, declining herd size and slower growth in milk per cow is more promising for U.S. farm milk prices.