You’ll recall November milk production was up 1.3 percent from 2021. The latest Dairy Products report indicates that extra milk primarily went to the vat and the churn.

Cheese production totaled 1.149 billion pounds, down 1.9 percent from October output, which was revised up 4 million pounds, but was up 1.6 percent from November 2021. Output year to date (YTD) hit 12.7 billion pounds, up 1.7 percent from a year ago.

Wisconsin produced 284.1 million pounds of that total, down 0.7 percent from October, but 1.0 percent above a year ago. California produced 208.7 million pounds, up 1.1 percent from October and 2.4 percent more than a year ago. New Mexico output slipped to 80.7 million pounds, down 3.3 percent from October but 2.4 percent more than a year ago. Idaho output dropped to 74.3 million pounds, down 12.7 percent from October, and 3.8 percent below a year ago.

Italian cheese output fell to 484.9 million pounds, down 2.4 percent from October but 1.1 percent above a year ago. YTD Italian stands at 5.4 billion pounds, up 2.7 percent. American type cheese slipped to 459.7 million pounds, down 2.1 percent from October but 2.2 percent above a year ago. YTD output, at 5.1 billion pounds is down 0.2 percent. Mozzarella output, at 380.9 million pounds, was up 1.5 percent from a year ago, with YTD at 5.1 billion pounds, down 0.2 percent.

The Jan. 6 Daily Dairy Report says “Cheesemakers consistently made big volumes of Mozzarella in 2022, a sign that Americans’ appetite for pizza and other foods replete with Italian-style cheeses continued to grow.”

Cheddar production fell to 319 million pounds, down 17.1 million pounds or 5.1 percent from October’s count, but was up 5.5 million pounds or 1.7 percent from November 2021. YTD Cheddar is at 3.6 billion pounds, down 1.1 percent from a year ago.

Butter output climbed to 169.9 million pounds, up 8.1 million pounds or 5.0 percent from October, and up 13.9 million pounds or 8.9 percent from a year ago. YTD butter output however stands at 1.9 billion pounds, down 1.2 percent from a year ago.

Yogurt totaled 346.8 million pounds, down 2.4 percent from a year ago, with YTD output at 4.3 billion pounds, down 2.7 percent.

Less cheese meant less whey. Output slipped to 74.6 million pounds, down 2.7 million pounds or 3.5 percent from October, and 1.3 million or 1.7 percent below a year ago. YTD whey is at 875.1 million pounds, up 2.0 percent. Stocks climbed to 72.9 million pounds, up 4.5 million pounds or 6.5 percent from October, and 13.2 million pounds or 22.1 percent above those a year ago.

Nonfat dry milk jumped to 159.5 million pounds, up 35.5 million pounds or 28.6 percent from October, but was 1.5 million pounds or 0.9 percent below a year ago. YTD powder was at 1.8 billion pounds, down 3.2 percent. Stocks grew to 256 million pounds, up 8.2 million or 3.3 percent from October, and 29.2 million or 12.9 percent above a year ago.

Skim milk powder output fell to 39.4 million pounds, down 16.8 million pounds or 29.9 percent from October, and down 20.2 million or 33.9 percent from a year ago. YTD SMP was at 486.3 million pounds, down 25.1 percent from 2021. HighGround Dairy called the report neutral on cheese and nonfat but bearish on butter and dry whey.

The USDA lowered its 2022 and 2023 milk production forecasts in the Jan. 12 World Agricultural Supply and Demand Estimates (WASDE) report. The 2022 estimate was reduced, based on lower expected milk per cow.

The 2023 forecast was lowered due to a smaller expected herd size for the year, though output per cow was unchanged from last month. USDA’s Cattle Report, issued Jan. 31, will provide an indication of producer intentions for retaining dairy heifers for addition to the breeding herd, according to the WASDE.

2022 production and marketings were estimated at 226.8 and 225.8 billion pounds respectively, down 200 million pounds on production and down 100 million on marketings from last month’s estimates. If realized, 2022 production would only be up 500 million pounds or 0.2 percent from 2021.

2023 production and marketings were estimated at 229.2 and 228.2 billion pounds respectively, down 300 million pounds on both from a month ago. If realized, 2023 production would be up 2.4 billion pounds or 1.1 percent from 2022.

Cheese was projected to average $2.1122 per pound in 2022 and compares to $1.6755 in 2021 and $1.9236 in 2020. The 2023 average was projected at $1.93, down 6.50 cents from last month’s estimate.

The 2022 butter price average was estimated at $2.8665 per pound and compares to $1.7325 in 2021 and $1.5808 in 2020. The 2023 average was projected at $2.33, down 13.50 cents from a month ago.

Nonfat dry milk will average $1.6851 per pound in 2022, says the WASDE, up from $1.2693 in 2021 and $1.0417 in 2020. The 2023 average was estimated at $1.34, down 3.50 cents from a month ago.

Dry whey will average 41.50 cents per pound in 2022, up from 57.44 cents in 2021 and 36.21 cents in 2020. The 2023 average was lowered a nickel to 41.50 cents per pound.

The 2023 price forecasts were lowered on expectations of weak domestic demand and price pressure in international markets, says the WASDE.

The 2022 Class III milk price average was $21.96 per hundredweight, up from $17.08 in 2021 and $18.16 in 2020. The 2023 average was projected at $18.85, down 95 cents from last month’s estimate.

The 2022 Class IV average is $24.47 and compares to $16.09 in 2021 and $13.49 in 2020. The 2023 estimate is $19.25, down 85 cents from a month ago.

Cash cheese prices shot higher the week of “Friday the 13th” then suffered a relapse. The Cheddar blocks gained 14.25 cents Monday, hitting $2.1975 per pound, highest since November 22, but cooled to a Friday finish at $2.00, down 5.50 cents on the week, while 8 cents above a year ago.

The barrels, after diving 13.25 cents the previous week, gained a dime Monday, hitting $1.8250, but closed Friday at $1.7075, 1.75 cents lower on the week, 25.25 cents below a year ago, and 29.25 cents below the blocks. Sales totaled 10 cars of block and 24 of barrel for the week at the CME.

HighGround Dairy’s “Monday Morning Huddle” warned that a fire at AMPI’s Portage, Wis., process cheese plant on Jan. 2 “may temporarily make more barrel Cheddar available as the coop works to re-open the facility.”

Dairy Market News reported that some Midwestern cheesemakers say the bullish market swings are dissimilar to what they are experiencing regarding demand. A majority of them say sales have softened in recent weeks. Not only spot interest, but contractual buyers have reduced some volumes. Milk availability has not changed much over the past three weeks. Spot prices are still being reported as low as $10 under Class. Cheese inventories are expected to grow near term.

Food service and retail cheese demand in the west is steady to lighter but contacts report steady demand from international purchasers. There is concern that lower global prices may contribute to lighter export demand ahead.