Search Site   
Current News Stories
Plant grasses below trees to provide haven for caterpillars
Illinois program turns cowgirl dreams into livestock research reality
Kentucky teachers are awarded the ‘National Excellence in  Teaching About Agriculture’
2020 dicamba restrictions 
now permanent in Illinois
Task force will examine Indiana’s drainage regs
Research is leaning toward resistant hybrids to combat tar spot
Kentucky produce growers asked to complete survey, food safety training

MI corn growers thank Biden for stance on biofuels
Tips for garden; don’t plant more than spouse can weed
Class III milk price are up and nearing a record
Beacon Credit Union names Loker as CCO
News Articles
Search News  
U.S. dairy consumption at highest levels since 1960s

By Lee Mielke

If there was any doubt about strength in the global dairy market, it was erased in the second Global Dairy Trade auction of 2022, its 300th trading event. The weighted average jumped 4.6 percent, biggest increase since March 2, 2021, and followed the 0.3 percent rise on Jan. 4 and the 1.5 percent fall on Dec. 21. Traders brought 67.6 million pounds of product to market, with the average price climbing to $4,463 U.S., highest since March 2014.

All products offered were in the black, led by whole milk powder, up 5.6 percent, after holding steady on Jan. 4. Skim milk powder was up 5 percent, following a 1 percent increase, and butter was up 5 percent, after inching 0.3 percent higher. Anhydrous milkfat was up 0.6 percent, after slipping 0.7 percent last time. Cheddar was up 1.1 percent following a 4.9 percent jump.

StoneX Dairy Group said the GDT 80 percent butterfat butter price equates to $2.7252 per pound U.S., up 12.8 cents, and compares to CME butter which closed Friday at $2.9350. GDT Cheddar, at $2.5157, was up 2.7 cents and compares to Friday’s CME block Cheddar at a real bargain $1.8075. GDT skim milk powder averaged $1.7977 per pound, up from $1.7114. Whole milk powder averaged $1.8517 per pound, up from $1.7536. CME Grade A nonfat dry milk closed Friday at $1.8150 per pound.

StoneX’s Dustin Winston said North Asia (which includes China) buyers continue to seem hesitant, market share was up just slightly from the last event, but remain well below last year’s levels. The Middle East picked up a large share of whole milk powder, according to Winston.

Speaking of China, December dairy imports fell a combined 13.4 percent from December 2020, according to HighGround Dairy’s (HGD) analysis, but adds the caveat: “While there is a lot of red on the table, it is important to remember the data is compared to a record December in 2020 with December 2021 the second highest ever observed despite the year over year losses.”

Whole milk powder imports took the biggest hit, said HGD, down 38 percent. Skim milk powder was down 21.6 percent, and whey products were down 31.9 percent, a 20-month low.

Bloomberg reported that China’s hog herd has rebounded and is now at a six-year high of 449 million, so with the country no longer aggressively building their herd, there has been a slowdown in whey demand for piglets, according to HGD.

Staying in the global market, EU November exports were up 1.7 percent from 2020, according to StoneX, which was stronger than the minus1.3 percent they forecast. “Exports to China are still rather weak, seeing a month to month decrease of 23 percent,” said StoneX, “but other countries such as Indonesia, Nigeria, Philippines, and the U.S. are making up for that. Shipments to Indonesia rose 57 percent month to month and up 38 percent YoY. Some of the largest month to month gains were butter, yogurt, and whey protein isolates. Liquid milk exports were down from the previous month but are still strong on a YoY basis,” according to StoneX.

Dairy prices here at home strengthened, except for cheese, in the Martin Luther King holiday shortened week. The Cheddar blocks closed Friday at $1.8075 per pound, down 11.25 cents on the week, lowest since Nov. 18, 2021, 24.50 cents below its Jan. 12 peak, but 19.75 cents above a year ago when they fell 11 cents to $1.61.

StoneX said it hears continued reports of tight butter and nonfat dry milk (NFDM) but not cheese. “Cheese demand is likely strong, but we have cheese out there to meet that demand. That seems to be the narrative developing this week and spot prices are reflecting that narrative.” Traders await the December Milk Production and Cold Storage reports issued Jan. 24.

Dairy Market News reported that milk availability varied in the Midwest. Plants running fully staffed operations say milk is available but the discounted prices of $3 and $4 under Class are no longer being offered. Still, there are plants running lighter lines, as employees are short due to COVID-related absences. Cheese sales were slowing, according to some, as prices rose and “market tones are lacking the bravado of prior weeks.”

Retail cheese demand is steady to lower in the West while food service is mixed. Contacts note that rising COVID cases in the region have caused a decline in sales. Food service mozzarella sales are, reportedly, increasing as strong demand is present for pizza making, thanks to football playoffs. International cheese demand remains strong but transportation issues caused by a shortage of truck drivers and port congestion continue to cause delays. Cheesemakers say milk is available but delayed deliveries and labor shortages are causing some plants to run reduced schedules, according to DMN.

Butter was firing on all cylinders, shooting to a $2.9350 per pound finish Friday, up 21 cents, highest since Sept. 28, 2015, and $1.5325 above a year ago. 32 sales transpired on the week. Butter’s CME record is $3.1350 per pound on Sept. 25, 2015. The U.S. price, while above the GDT, is below European levels.

Per-capita dairy consumption in the United States has been growing and is at the highest levels since 1960, according to the National Milk Producers Federation. “Exports in 2021 are on pace for a record,” NMPF said, “and now, with last year’s retail sales data available, we can see that 2020’s gains in grocery-store purchases weren’t just a rechanneling of lost school and restaurant business toward at-home consumption. By comparing 2021 with 2019, we can see that dairy’s gains are built to last, according to data from industry researcher IRI.”

HGD’s Lucas Fuess, speaking in the Jan. 24 ‘Dairy Radio Now’ broadcast, said Class III and Class IV futures curves look very good for farmer returns this year but cautioned that demand destruction could occur due to the rising prices.

“If we do get too expensive, there could be some buyers around the world that take a step back and maybe hesitate to purchase U.S. dairy,” he warned, “But in the time being, we don’t see that happening as the world remains short on protein and continues to pay up even at these purchase levels.”

The February Federal order Class I base milk price was announced by the USDA at $21.64 per hundredweight, up $1.93 from January, $6.10 above February 2021, and the highest Class I price since December 2014. It equates to $1.86 per gallon, up from $1.69 in January and $1.34 a year ago.

The USDA’s latest Livestock, Dairy and Poultry Outlook, issued Jan. 19, mirrored milk price and production projections in the Jan. 12 World Agricultural Supply and Demand Estimates report.

The Outlook reported that the number of milk cows is projected to continue decreasing in the first part of 2022. For the first half of the year, milk cows are projected to average 9.38 million head. However, in the second half of the year, they are projected to increase to 9.385 million. The estimated number of cows for the year 2022 is 9.385 million, unchanged from last month’s projection. Average yield per cow is projected to be 24,265 pounds, unchanged from last month’s projection.