MARKETING

At mid-morning on April 6, Class futures portended an April price at $18.61; May, $17.77; June, $18.08; and July at $18.62, with a peak of $19.60 in October.

The Class IV price is $18.38, down 48 cents from February, $6.44 below a year ago, and the lowest since December 2021. Its three-month average is at $19.08, down from $23.97 a year ago, and compares to $13.71 in 2021.

We have plenty of product to sell, despite February milk production only being up 0.8 percent from 2022. The Dairy Products report shows cheese production totaled 1.109 billion pounds, down 7.9 percent from January output which was revised down 4 million pounds, and was up just 0.4 percent from February 2022. Output for the two months totaled 2.3 billion pounds, up 1.6 percent from the same period a year ago.

Italian cheese totaled 460 million pounds, down 8 percent from January and 1.4 percent less than a year ago. American output slipped to 453.1 mil-

Cheddar production, the cheese traded at the Chicago Mercantile Exchange, fell to 325.4 million pounds, down 28.5 million pounds or 8.1 percent from January’s count, which was revised down 2.2 million pounds; but was up 17.3 million pounds, or 5.6 percent, from February 2022. Year-to-date cheddar stood at 679.3 million pounds, up 6.1 percent from 2022.

Butter output dipped to 186.4 million pounds, down 14.9 million pounds or 7.4 percent from January, but was up 2.9 million pounds or 1.6 percent from a year ago. Year-to-date butter output was at 387.7 million pounds, up 2.7 percent from a year ago.

Yogurt production totaled 401.3 million pounds, up 7.4 percent from a year ago, and hard ice cream output hit 59.1 million pounds, up 7.7 percent from a year ago.

Dry whey production totaled 66.5 million pounds, down 10.2 million pounds or 13.3 percent from January and down 3.8 million pounds or 5.7 percent from a year ago. Stocks grew to 69.4 million pounds, up 6.4 million or 10.2 percent from a year ago.

Nonfat dry milk output climbed to 178.5 million pounds, up 3.5 million pounds or 2 percent from January and up 7.7 million or 4.5 percent above a year ago. Stocks jumped to 310 million pounds, up 39.5 million pounds, or 14.6 percent from January, and up 21.6 million pounds or 7.5 percent from a year ago.

Skim milk powder production totaled 38.2 million pounds, down 6.4 million or 14.4 percent from January, but 8.6 million pounds or 28.9 percent above a year ago.

StoneX says the more-than-expected surge in cheese is “bearish in and of itself, but when considered in the context of lighter-than-expected inventories from the February Cold Storage report, we surmise that cheese disappearance — both domestic as well as export — was likely quite strong in February.”

The report is bearish on butter, says StoneX, “But like with cheese, inventories of butter in February were lower than expected and implies better-thanexpected demand. It would seem fair to suggest that the staying power of late in the $2.30s is the result of good demand at budget price levels.” “The report also likely underscores dismal domestic and export demand of nonfat dry milk.”

The March 21 Global Dairy Trade auction removed hopes of things turning around. The weighted average dropped 4.7 percent (the biggest loss since October 2022) and followed a 2.6 percent drop March 21, 0.7 percent on March 7, and 1.5 percent decline on Feb. 21.

Traders brought 52.5 million pounds of product to market, down from 59.1 million on Mar. 21, and the average metric ton price fell to $3,227 U.S., down from $3,361.00 on March 21.

Anhydrous milkfat led the declines, down 7.2 percent after falling 3.8 percent on March 21. Whole milk powder followed, down 5.2 percent after a 1.5 percent descent. Butter was down 3.3 percent after falling 3 percent last time, and buttermilk powder was down 3.3 percent. Skim milk powder was down 2.5 percent after falling 3.5 percent on March 21.

Cheese was the only positive, up 3.8 percent after leading the declines last time with a 10.2 percent drop, and that after dropping 10.2 percent on March 7.

GDT 80 percent butterfat butter equates to $2.0333 per pound U.S., down 6.8 cents after losing 6.7 cents on March 21, and compares to CME butter which closed April 6 at $2.3175. GDT cheddar, at $1.8902, was up 5.2 cents after dropping 20.7 cents last time and 26.2 cents the time before that. April 6’s CME block cheddar closed at $1.83. GDT skim milk powder averaged $1.1699 per pound, down from $1.2012, and whole milk powder averaged $1.3846 per pound, down from $1.4641. CME Grade A nonfat dry milk closed at $1.125.

HighGround Dairy says, “Even though the direction of the result was expected, the scale of the price slide is a surprise. As has been the trend in 2023 so far, GDT values continue to correct lower, with light demand the headline driver. With a poor macroeconomic outlook still in play, it would be remiss to assume this is the bottom of the market.”

Adding to the woes, February U.S.