You’ll recall June milk production was down 1 percent from a year ago, however milk components are up. The June Dairy Products report shows the results.

Total cheese production dropped to 1.161 billion pounds, down 4 percent from May and down 1.4 percent from June 2023. First half 2024 cheese output amounted to 7.1 billion pounds, up just 0.2 percent from 2023.

Italian cheese production totaled 485.8 million pounds, down 3.9 percent from May and 0.1 percent below a year ago. Year to date output hit 3 billion pounds, up 3.4 percent.

American output slipped to 457.2 million pounds, down 6.3 percent from May and 4.9 percent below a year ago. YTD, at 2.8 billion pounds, was down 4.8 percent from 2023.

Mozzarella, at 391.5 million pounds, was up 2 percent from a year ago, with YTD output at 2.4 billion pounds, up 4.5 percent.

Cheddar output, the cheese traded daily at the CME, totaled 312 million pounds, down 17.2 million pounds or 5.2 percent from May, and down 31.1 million pounds or 9.1 percent, from a year ago, which no doubt helped keep prices strong. YTD Cheddar was at 1.9 billion pounds, down a hefty 7.9 percent from a year ago.

Butter production fell to 169.2 million pounds, down 35.2 million pounds or 17.3 percent from May, but was up 4.7 million or 2.8 percent from a year ago, as farm butterfat levels were strong. YTD butter, at 1.2 billion pounds, was up 4.5 percent from 2023.

Yogurt production totaled 390.7 million pounds, up 1.7 percent from a year ago, with YTD output at 2.4 billion pounds, up 4 percent.

Hard ice cream, at 66.5 million pounds, was down 0.3 percent from 2023. YTD, 370.6 million pounds had been produced, up 1.6 percent from a year ago.

Dry whey climbed to 81.5 million pounds, up 4.9 million pounds or 6.4 percent from May, but was down 6.7 million or 7.5 percent from a year ago, as the smaller cheese output meant less whey stream. YTD whey was at 469.2 million pounds, down 0.2 percent.

Whey stocks crept up to 67.8 million pounds, up 3.3 million or 5.2 percent from May, but were down 14.8 million pounds or 17.9 percent from those a year ago.

Nonfat dry milk output dropped to 127.8 million pounds, down 41.3 million pounds or 24.4 percent from May, and was down 45.3 million or 26.1 percent from a year ago. YTD NFDM was at 940.5 million pounds, down 16.8 percent.

Stocks fell to 273.2 million pounds, down 7.4 million, or 2.7 percent from May, and down 18.1 million pounds or 6.2 percent from 2023.

Skim milk powder production jumped to 60.5 million pounds, up 18.6 million pounds or 44.5 percent from May, and up 10.8 million or 21.6 percent from a year ago. YTD SMP was at 259.6 million pounds, down 11.8 percent from 2023.

After dropping 8 cents the previous week, CME Cheddar block cheese slipped to $1.84 per pound the first Monday in August, lowest since May 31, but closed Friday at $1.9575, up 10.75 cents on the week but 3.25 cents below a year ago.

The barrels fell to $1.91 Monday, lowest since July 16, but finished the week 7.50 cents higher at $2.0050, 18 cents above a year ago and 4.75 cents above the blocks. Sales included 17 loads of block and 7 of barrel on the week.

StoneX stated in its Aug. 9 Early Morning Update, “milk remains tight, fresh cheese remains somewhat snug out there, and buyers are willing to own what is on offer in the $1.90 plus cheese price area. The futures markets are reflecting that dynamic.”

State fairs and regional events are in full swing and curd producers have been notably active, according to Dairy Market News. But, retail Cheddar/Italian style cheesemakers say buyers are in a hesitant wait-and-see cycle, as market prices have held under $2 per pound. Milk availability reports vary from one processor to the next but is “very tight.” As more milk moves into the Southern region of the U.S. for Class I utilization, cheesemakers are receiving calls from processors looking for milk. Most report that their milk supplies are already tight or allotted to the vat and they have none to offer. Milk pricing is also ticking higher.

Cheese production in the west is steady to stronger. Class III milk demand is generally strong for cheese however, milk availability remains seasonally tighter, putting some seasonal constraints on production. Domestic demand was mixed this week. Some manufacturers indicate purchasing interest thus far for 2024 has had many peaks and valleys.

Cream continued to tighten in the Midwest as summer heat and high humidity made their way through the region in recent weeks. Butter makers continue to look west for cream but that’s quickly fading. Butter makers are churning when possible or micro-fixing (cutting frozen 68-pound blocks to 1 pound or quarter-pound sticks). Butter sales are seasonally steady to quiet. Food service demand is expected to ramp up in the near-term as schools prepare to reopen. Retail buyers have yet to start their late-summer/early-fall push, but that uptick is expected soon. Market tones are range bound to bullish, according to DMN.

Churn capacity is increasing in the West with maintenance projects coming to an end but production continues to be seasonally weaker, especially bulk production. Inventory to cover anticipated fourth quarter demand continues to be built but cream volumes are tightening further. Plenty of retail butter is available but bulk loads are somewhat tight. Domestic demand varies from steady to slightly stronger. Sentiment is neutral to somewhat bullish, says DMN.

Grade A nonfat dry milk closed Friday morning at $1.20 per pound, down 4 cents on the week, lowest in almost three two weeks but is 9 cents above a year ago, with 27 sales logged.

After hitting its highest price in two years the previous week, dry whey finished Friday at 56.25 cents per pound, down 4.75 cents on the week, but 29.25 cents above a year ago. There were 10 sales logged on the week at the CME.

HighGround Dairy reported that a dryer fire in the Upper Midwest limited supplies of the commodity and ongoing strong demand for high-protein products also crimped volumes. Apparently, the situation reversed by week’s end.

U.S. dairy exports in June were up 1.2 percent from June 2023 but down from June 2020, 2021, and 2022, according to HighGround Dairy. Increased purchases from Southeast Asia, Canada, and South Korea helped the export picture.

Cheese sailings were up for the eighth month in a row, but HighGround warned “The tide is turning. Sales slowed from the 100-million-plus pound shipments in March, April, and May. June’s total of 85.7 million pounds was certainly impressive historically, but these sales were likely booked in March and April as the U.S. cheese market began to rally, helping to explain the month-to-month decrease.”

Skim milk powder exports, at 134.4 million pounds, were down 10 percent, and down from a year ago for the eighth time in ten months. HGD cited weak buying from Mexico, down 21 percent, though Southeast Asian demand was up 21 percent from June 2023 “and up 42 percent from May’s poor showing.”