There was good news on the price front for U.S. dairy farmers. The USDA announced the May Federal order Class III benchmark milk price at $18.55 per hundredweight, up $3.05 from April, $2.44 above May 2023, and the highest since Jan. 2023. 

Late Friday morning Class III futures portend a June price at $19.56; July, $20.01; August, $20.35; and September at $20.20.

The May Class IV price is $20.50, up 39 cents from April, $2.40 above a year ago, and the highest since November 2023. Its five-month average sits at $19.99, up from $18.66 a year ago, and compares to $24.44 in 2022.

You’ll recall April milk production was down 0.4 percent from a year ago and the April Dairy Products report shows wehre the milk ended up. Cheese production fell to 1.187 billion pounds, down 3.0 percent from March, but was up 1.8 percent from April 2023. The March total was revised down 2 million pounds and output for the first four months of 2024 totaled 4.75 billion pounds, up 0.5 percent from 2023.

Wisconsin output totaled 293.7 million pounds, down 2.7 percent from March but up 4.3 percent from a year ago. California produced 205.5 million pounds, down 4.5 percent from March and 0.9 percent below a year ago. Idaho contributed 89 million pounds, down 0.1 percent from March but 2.9 percent above a year ago. New Mexico, with 77.9 million pounds, was down 6.0 percent from March and 1.4 percent below a year ago.

Italian cheese production totaled 503.9 million pounds, down 2.8 percent from March but 6.2 percent above a year ago. American output fell to 468.1 million pounds, down 4.3 percent from March and 4.7 percent below a year ago. Mozzarella, at 401.2 million pounds, was up 6.1 percent from a year ago.

Cheddar fell to 322.3 million pounds, down 18.5 million or 5.4 percent from the March level, which was revised down 2.5 million pounds, and was down 30.4 million pounds or 8.6 percent, from a year ago. YTD Cheddar was at 1.3 billion pounds, down 6.7 percent.

Butter production slipped to 207.8 million pounds, down 2.7 million pounds or 1.3 percent from the March total, which was revised up 2 million pounds, but was up 10.5 million pounds or 5.3 percent from a year ago as high prices incentivized churns to stay busy. YTD butter was at 833.3 million pounds, up 4.9 percent from 2023.

Yogurt production totaled 412.4 million pounds, up 10.9 percent from a year ago.

Strong cheese output provided plenty of whey. Dry whey output crept up to 81.2 million pounds, up 1.3 million or 1.6 percent from March, but was down 6.5 million or 8.2 percent from a year ago. YTD whey stands at 311.0 million pounds, up 3.6 percent. Stocks shrunk to 72.6 million pounds, down 8.7 million or 10.7 percent from March and 6.5 million pounds or 8.2 percent below those a year ago.

Nonfat dry milk output fell to 173.4 million pounds, down 10.6 million or 5.8 percent from March, and down 25.1 million or 12.7 percent from a year ago. YTD powder was at 642.7 million pounds, down 14.4 percent. Weak global demand sent stocks climbing, hitting 280.6 million pounds, up a whopping 47.4 million pounds, or 20.4 percent from March, but were 17.1 million pounds or 5.7 percent below 2023. The Daily Dairy Report points out that this was the largest March to April increase ever recorded.

Skim milk powder production jumped to 36.3 million pounds, up 8 million pounds or 28.0 percent from March, but was down 9.5 million or 20.7 percent below a year ago. YTD SMP was at 157.7 million pounds, down 20.3 percent from 2023.

HighGround Dairy’s Cara Murphy reported in the June 10 “Dairy Radio Now” broadcast that Cheddar output was down for the sixth month in a row and the lowest since 2019. She also said that Mozzarella output surpassed 400 million pounds for the first time ever. As to the increase in powder stocks, she blamed poor demand, even while NFDM output was the lowest since 2013.

Murphy reported that a third dairy worker had contracted avian influenza but has since recovered. The Centers for Disease Control and Prevention again affirmed that the health risk for humans from the influenza is low and said pasteurized milk and dairy products remain safe for consumption.

April U.S. dairy exports totaled just under 500 million pounds, up 3.6 percent from a year ago, however HighGround Dairy points out that the increase compares to a weak April 2023. Year-to-date totals are trending 0.9 percent ahead of a year ago. “Mexico bolstered the total,” says HGD, with 142.9 million pounds moving across the border, second-highest volume on record, just behind March 2023.”

Cheese exports totaled 102 million pounds, up 26.7 percent. HGD suggests these sales were likely booked in early first quarter when prices were in the mid-$1.40s to low $1.60s. Sales to Mexico were record breaking for the month, up 53 percent.

Nonfat dry milk and skim milk powder exports fell for the second month, down 2.5 percent, but HGD says this was markedly better than March’s loss of 18.2 percent. Volumes to Mexico were down 1.8 percent, but soared versus March, up 24 percent.

Dry whey exports were up 43.1 percent, thanks to China returning to the market, increasing its purchases by 42 percent.

Butter exports were up 23.3 percent, though year to date are down 27.4 percent. The U.S. was a net importer of butter but exports were the largest since May 2023, according to HGD, and first time shipments have increased since January 2023.

CME block Cheddar closed the first Friday of June at $1.8450 per pound, up 3.50 cents on the week, ending three weeks of decline, and 42.25 cents above a year ago.

The barrels finished at $1.9550, 1.50 cents higher, 38.50 cents above a year ago, and 11 cents above the blocks. There were 13 sales of each this week.

Central region cheesemakers tell Dairy Market News that demand has picked up since earlier in the spring. Pizza cheese orders are and have been healthy, but retail orders have also picked up. A number of cheesemakers are oversold, or if they do have an occasional extra load, it is spoken for by current customers. Milk is available but offers are declining.

Cheese output is mostly steady in the West. Educational breaks are providing some additional milk however output is seasonally weakening in the southwest. Domestic cheese demand is steady but Mexican buyers have been the most consistent purchasers during much of first and second quarter. Export demand is steady to moderate, according to DMN.