Global Dairy Trade buyers are stepping up activity

Mozzarella output grew to 404.9 million pounds, up 4.1 percent from a year ago, with output for 2022 hitting 4.7 billion pounds, up 3.8 percent from 2021.

Cheddar production shot up to 338.5 million pounds, up 18.2 million pounds or 5.7 percent from November’s count, which was revised up 1.3 million pounds, and was up 4.8 million pounds or 1.4 percent from December 2021. Cheddar output totaled 3.9 billion pounds in 2022, down 0.8 percent from 2021.

Butter output jumped to 187.0 million pounds, up 16 million pounds or 9.4 percent from November, and was up 7 million pounds or 3.9 percent from a year ago. Butter output for all of 2022 totaled 2.1 billion pounds, down 0.7% from 2021.

Yogurt totaled 361.0 million pounds, down 2.6 percent from a year ago, with year-to-date output at 4.6 billion pounds, down 2.7 percent.

Dry whey production climbed to 76 million pounds, up 4.1 million pounds or 5.7 percent from November’s total which was revised down 2.7 million pounds, and was virtually unchanged from a year ago. Whey output for 2022 totaled 948.4 million pounds, up 1.5 percent from 2021.

Stocks climbed to 78.6 million pounds, up 5.6 million or 7.7 percent from November, and up 21.5 million pounds or 37.7 percent from 2021.

Nonfat dry milk output jumped to 179 million pounds, up 20.8 million pounds or 13.2 percent from November, and up 11.2 million or 6.7 percent above a year ago. Powder output for the year totaled 1.97 billion pounds, down 2.4 percent from 2021.

Stocks grew to 264 million pounds, up 5 million pounds or 1.9 percent from November, and up 11.3 million pounds or 4.5 percent from a year ago.

Skim milk powder output totaled 48.9 million pounds, up 8.5 million or 21.1 percent from November, and just 300,000 pounds or 0.7 percent above a year ago. Skim milk powder output for all of 2022 amounted to 536.2 million pounds, down 23.2 percent from 2021.

Feb. 7’s Global Dairy Trade saw its weighted average jump 3.2 percent, biggest increase since Sept. 6, 2022, and followed the 0.1 percent slippage on Jan.

17, and two successive declines prior to that. Traders brought 71.8 million pounds of product to market, up from 70.3 million on Jan. 17, and the average metric ton price climbed to $3,456 U.S., up from $3,393.00 on Jan. 17.

The gains were led by butter, up 6.6 percent after slipping 0.6 percent on Jan. 17. Anhydrous milkfat was up was up 4.8 percent following a 0.9 percent slippage. Whole milk powder was up 3.8 percent after inching 0.1 percent higher, and skim milk powder was unchanged, after a 0.3 percent loss. Cheddar was up 2.3 percent after jumping 4 percent.

StoneX Dairy Group says the GDT 80 percent butterfat butter price equates to $2.0999 per pound U.S., up 13.1 cents from Jan. 17, and compares to Chicago Mercantile Exchange butter which closed Feb. 10 at $2.4125. GDT cheddar, at $2.2591, was up 4.9 cents, and compares to Feb. 10’s CME block cheddar at $1.8625. GDT skim milk powder averaged $1.2834 per pound, down from $1.2891, and whole milk powder averaged $1.5101 per pound, up from $1.4598. CME Grade A nonfat dry milk closed Feb. 10 at $1.2650 per pound.

Dustin Winston reported buyers from many regions stepped up their activity. “North Asian purchases, which includes China, were higher than both last event and last year, as the region returned to their normal market share of more than 50 percent. Purchases by European, African, and North American participants were also stronger than last year and last event.”

After falling 9.5 cents the previous week, CME block cheddar fell to $1.835 per pound on Feb. 7 (the lowest since Sept. 6) but closed Feb. 10 at $1.8625. This is down a quarter-cent on the week and 4.5 cents below a year ago.

The barrels finished at $1.575, down 5.5 cents on the week, 33.5 cents below a year ago, and 28.75 cents below the blocks on seven sales of block and 26 of barrel for the week.

Retail cheddar and some Italian style cheesemakers reported steady to strong interest this week, according to Dairy Market News. Timing is optimal for increasing demand, says Dairy Market News, as milk availability has been more than adequate since late 2022. Spot milk prices were again at the $10 under Class level but milk is not overwhelming plants, though cheese production is “very active.”

Western cheese demand was steady into retail and food service though some report softer sales. Pizza sales are lagging some and export sales are softening, as cheese produced in European is being sold below U.S. prices. The lighter export demand has caused some cheesemakers to shift from blocks to barrels.

After jumping 10.25 cents the previous week, cash butter closed at $2.4125 per pound Feb. 10, up 3.75 cents on the week but 34.25 cents below a year ago when it gained 25.5 cents. There were only nine sales reported on the week.

Butter producers say demand is “not gangbusters,” but customers are coming back after a somewhat slow start to the quarter. Production is very busy, as cream remains widely available in the region and from Western suppliers.

Cream is also plentiful in the West with demand steady to higher. Butter output is strong. Butter inventories are outpacing current demand but holders want to assure coverage for midyear demand, says Dairy Market News. Retail demand is light.

Grade A nonfat dry milk closed Feb. 10 at $1.265 per pound, up 2 cents on the week, highest in three weeks, but 63.25 cents below a year ago. There were 10 loads that exchanged hands on the week.

CME dry whey finished Feb. 10 at 42.5 cents per pound, up a penny on the week but 39.75 cents below a year ago, with two sales reported at the CME for the week.

In politics, the USDA has proposed changes to nutrition standards for school meals, which could impact chocolate milk consumption, warns the Feb. 6 Daily Dairy Report. The Report says USDA put two options forward, both including a reduction in sugar in flavored milks, such as chocolate.

The National Milk Producers Federation and the International Dairy Foods Association expressed “optimism” for the updates, “specifically USDA’s plans to maintain low-fat flavored milk for students.

“Children having access to the healthful foods they need in school is a key priority for dairy farmers,” said NMPF’s Jim Mulhern. “We are pleased USDA is maintaining low-fat flavored milk in schools, but we question why USDA would propose school meal options that could limit a child’s access to these nutrients and we urge instead that they expand access to dairy options.”

Lee Mielke is a syndicated columnist who resides in Everson, Wash. His weekly column is featured in newspapers across the country and he may be reached at lkmielke@juno.com. v