U.S. milk output remains slightly above a year ago. The USDA’s latest preliminary data showed October production at 18.7 billion pounds, up 0.2 percent from October 2023, third month in a row to top that of a year ago. September output was revised to 18.2 billion pounds, up 52 million pounds from last month’s estimate, and up 0.4 percent from September 2023, instead of the 0.1 percent originally reported. October’s 24-state total, hit 17.96 billion pounds, up 0.4 percent, with September output up 0.5 percent, instead of the 0.2 percent reported.

October cow numbers increased for the first time since May 2023, jumping to 9.365 million head, up 19,000 from the September count, which was revised up 18,000 head from last month’s count, and was up 10,000 head or 0.1 percent from October 2023. The 24-state count, at 8.921 million, was up 16,000 from September, which was revised up 18,000 head, and was up 21,000 or 0.2 percent from a year ago. The October U.S. dairy herd is the largest since September 2023.

October output per cow in the 50 states averaged 1,996 pounds, up 3 pounds or 0.15 percent from a year ago. The 24-sState average, at 2,013 pounds, was up 4 pounds or 0.2 percent from a year ago.

StoneX Nov. 19 Early Morning Update stated, “There were a lot of anecdotal comments about strong components in October, especially fat. Milk pooled on the Federal Milk Marketing Orders during October had a weighted average fat content of 4.22 percent. That was up 1.2 percent from last year, which is weaker growth than the plus 1.9 percent we saw in September and 2.6 percent in August.

“Protein content was 3.33 percent, up 0.8 percent from last year and slower than the plus 0.9 percent we saw in September and 1.5 percent in August. Like with fat, protein content was down from last year in California and the PNW orders,” says StoneX.

Cash dairy prices were looking mixed the week before Thanksgiving but cheese and butter prices are at a discount to global levels so exports could be strong and, if domestic demand increases, things could get interesting.

CME block Cheddar climbed to $1.7250 per pound Wednesday, but the afternoon’s bearish October Milk Production report may have caused some re-evaluation, as Thursday’s trading took the price down to $1.6825, after closing the previous Friday at $1.6925. The barrels hit $1.73 Wednesday but fell Thursday to $1.68, after closing Friday at $1.6850.

Midwest cheesemakers tell Dairy Market News that demand is slightly slow to very busy. Holiday orders have been fulfilled and some plants are running slower schedules. Mozzarella and other Italian style cheeses are moving quickly from warehouses to end users. Milk availability varies widely and spot prices in the Midwest and Upper Midwest were still reported over Class III.

Cheese output is steady in the West. Spot milk is tighter in the southwestern part of the region. Contractual demand is steady and some companies recently finishing fiscal years convey that full-year sales are in-line with expectations. Domestic demand is lighter while export demand is steady. Domestic prices continue to be competitive which helps counter less robust domestic demand.

Cash butter fell to $2.5475 per pound Thursday, lowest since Jan. 23. It had closed Friday at $2.63.

HighGround Dairy points out that there are limitations and capacity issues with making butter for export. Exported product is 82 percent fat and unsalted and those issues may temper sales, “but the increased demand could be price-supportive.”

DMN says retail butter demand is seasonally active but either lower or steady compared to a year ago. Some say demand has picked up for the end-of-year holiday weeks. Butter availability is somewhat steady and in line with previous weeks. Salted butter volumes are available, while unsalted varieties are lighter. Cream is ample and Midwestern butter makers were turning offers away. Some plants are expected to be down for four to five days next week for maintenance so there may be cream looking for a home, says DMN.

Retail butter production is steady in the west, while bulk output is lighter. Cream is readily available. Domestic demand is mostly lighter near-term. Buyers are generally set for end-of-month holiday needs but first quarter booking is stronger.

Grade A nonfat dry milk was holding at Friday’s close of $1.40 per pound, but it lost 2 cents Thursday, slipping to $1.38.

StoneX points out that the powder market is “finding solace in not deviating from the current price level as comments around immediate demand remain subdued. Between milk production concerns in California, which are on-going presently, and the fact that California plants produced 50 percent of our NFDM/SMP in 2023, NFDM has likely priced in much of the supply side of the equation or tried to. The other side of the story is any increase in demand as trading partners work through the last of their less expensive powder inventory,” StoneX concludes.

Dry whey closed Thursday at 64.75 cents per pound, after finishing last week at 65.50 cents per pound, highest since March 31, 2022.

HighGround points out “Ravenous demand for high-protein whey products is causing prices across the complex to move higher.”

The Daily Dairy Report’s Sarina Sharp writes in the Nov. 15 Milk Producer Council newsletter; “While consumers have all the cheese and butter they can stomach, they can’t get enough dairy protein. Most adults are actively trying to consume more of it. Protein is especially vital for the roughly 15 million Americans taking glucagon-like peptide-1 medications like Ozempic or Wegovy. As they eat significantly fewer calories, many such users prioritize foods that pack a bigger nutritional punch. Highly concentrated whey powders, like whey protein isolates (WPIs), are becoming increasingly popular,” says Sharp.

“Makers of WPIs and whey protein concentrates (WPCs) with at least 50 percent protein are using up as much whey as they can, leaving less for WPC-35 and whey powder,” says Sharp. “While demand for less concentrated whey products is steady, lower production of those products has boosted prices significantly.” She also pointed out rising powder prices, stating “Milk powder production will be limited as new cheese production capacity pulls more milk away from dryers.”

China was a primary driver of sustained counter-seasonal gains in milk powders in Tuesday’s Global Dairy Trade but Chinese imports dropped 12.3 percent year-over-year in October. HighGround Dairy says the sharpest decline was seen in trade from New Zealand, which fell 19.5 percent from a year ago and was the lowest overall import volume since 2018.

Skim milk powder imports were down 53.1 percent, according to China Customs Statistics, effectively halving those of a year ago, according to HGD. Imports from New Zealand experienced a similar reduction but still accounted for 57.5 percent of the total imports.

Whole milk powder imports slipped 15.8 percent. HGD says, “This is the smallest October import volume since 2016. Berning said inventories are reportedly dwindling in China and may be the reason they are buying again and there were adjustments to their herd size.”

Whey imports rose again, up 4.6 percent, with volumes from the U.S. increasing 3 percent, according to HGD, while Dutch volumes doubled compared to the previous year.