The USDA’s latest Supply and Utilization data shows dairy’s commercial disappearance in 2022 was strong, up 1.6 percent, according to StoneX broker Dave Kurzawski in the Feb. 20 “Dairy Radio Now” broadcast.

Total cheese usage was up 2.1 percent, according to Kurzawski, buoyed by exports, which were up 12 percent from 2021. American cheese exports were up 38 percent.

The story on butter was not as good. Disappearance was down 4.6 percent for the year. Exports, however, were up 47.6 percent, indicating domestic demand was lagging, he said, down 7 percent, prompting the question “Why is butter at $2.40 per pound?”

The simple answer, according to Kurzawski is that “The demand for fat is not down. Demand for butter at retail is down and demand for butter at restaurants is down, but demand for fat is probably as strong as it’s been for quite some time.”

Total nonfat dry milk utilization turned positive in December, following six consecutive months below 2021 levels. Domestic usage rose above a year ago in August and powder exports saw their biggest volume since December 2019.

Cheddar block cheese at the Chicago Mercantile Exchange climbed to $1.89 per pound Tuesday but closed Friday at $1.88, up 1.75 cents on the week but 10.75 cents below a year ago.

The barrels ended the week at $1.5475, 2.75 cents lower, 38.75 cents below a year ago, and 33.25 cents below the blocks. Sales totaled 6 cars of block and 45 of barrel for the week, highest barrel total since the week of May 17, 2021.

The week was wanting in fresh news for the market to feed on. Traders will have plenty the week of Feb. 20, though it will be shortened due to the Presidents Day holiday Monday. The Global Dairy Trade auction is Tuesday morning, the January Milk Production report is issued Wednesday afternoon, and the January Livestock Slaughter report is out Thursday. The January Cold Storage report is issued Friday afternoon, long after the markets have traded for the week.

Midwest barrel processors tell Dairy Market News that larger contractual based customers have cut back purchases, which affected production schedules this week and moved milk into other varieties when possible. Some retail Cheddar-Italian style cheesemakers said sales were “hearty.” Milk remains notably available and spot loads at $10 under Class III were reported for the 8th consecutive week but prices varied throughout the region. Some cheesemakers were not seeing offers that low but found milk closer to $4 and $5 under Class. Eyes are still on the large price gap between blocks and barrels. While marketers expect an eventual convergence of the two, there is a bit of instability, however, market tones are not necessarily bearish, but viewed more as mixed, says DMN.

Western cheese demand continues mixed domestically. Both steady and softer sales into retail and food service markets were noted. Contract sales were steady with some reports of inventories being sold out through first quarter and almost sold out for most of second quarter. Export sales saw an uptick. Some cheesemakers are shifting from blocks to barrels. Ample regional milk volumes are available and cheese production is steady to strong, says DMN.

CME butter climbed to $2.4575 per pound Tuesday, highest since Dec. 22, 2022, but closed Friday at $2.3750, down 3.75 cents on the week and 31.50 cents below a year ago, on 10 sales for the week.

Midwest butter sales are reportedly “meeting expectations,” says DMN, however “Expectations in mid-February represent a somewhat low bar when compared to the spring and late summer/early fall months.” Butter contacts say sales could be worse. Cream continues to flow to butter plants, and at favorable pricing for churning.

Cream volumes are also readily available in the West and cream demand is steady to light. Less than fully staffed production schedules have been a challenge to some operations but strong butter production continues. “Stakeholders look to assure midyear demand coverage,” says DMN, “but demand is light ahead of the expected increase related to the spring holidays.” Retail demand is light and some report sales are below seasonal forecasts. Spot market demand is mixed as some contacts note light demand, while others note no spot market activity taking place. Second quarter contract sales had a slight uptick from the previous week but export sales are light, reports DMN, due to “uncompetitive prices compared to the world stage.”

Grade A nonfat dry milk dropped 3.75 cents Tuesday, following the GDT Pulse, and fell to a Friday finish at $1.22 per pound, 4.50 cents lower on the week and 63 cents per pound below a year ago, with 9 sales reported for the week.

Dry whey gained a penny Monday and closed Friday at 45 cents per pound, up 2.50 cents but 36 cents below a year ago, with only 1 sale recorded on the week.

Dairy farms are calling it quits. The Daily Dairy Report’s Sarina Sharp wrote in the Feb. 10 Milk Producers Council newsletter, “Livestock auctions have a growing line-up of dairy herds on the docket.” She adds; “The combination of high slaughter volumes and low heifer supplies could speed contraction in the milk cow herd, but the shift from today’s surplus to tighter milk supplies will take some time. And if markets bounce back prematurely, the painful process will drag on even longer.”

In politics, the Green Bay-based American Dairy Coalition (ADC) gave a thumbs up to Sen. Kirsten Gillibrand (D-N.Y.) for “the dairy priorities she has announced ahead of the upcoming 2023 Farm Bill negotiations, especially her plan to reintroduce the Dairy Pricing Opportunity Act.”

An ADC press release stated that Gillibrand first introduced the legislation in 2021 with Sen. Patrick Leahy (D-Vt.) and Susan Collins (R-Maine). “The introduction of this bill was a direct result of Sen. Gillibrand’s 2021 Senate Agriculture Subcommittee hearing on modernizing milk pricing and the FMMO system and has paved the way for critical discussions surrounding FMMO reform in not just Class I pricing, but potentially other areas as well,” says the ADC.

The wholesomeness of dairy needs to be defended and the latest salvo is a book, No. 5 on a New York Times list of “10 Nutrition Myths Experts Wish Would Die.” “Plant Milk is healthier than dairy milk.”

“It’s just not true,” said Kathleen Merrigan, professor of sustainable food systems at Arizona State University and a deputy secretary of agriculture under President Barack Obama, in the article.

“Indeed, the myth persists, despite how plant-based beverages have much-lower protein, numerous additives of dubious value, and a lack of uniform quality that should give anyone pause.”

A press release from the National Milk Producers Federation states, “It’s also not shocking that the misinformation continues. Money talks, and the plant-based sector is well-funded, with plenty of media allies and a ready-made base of support in a vegan community that insists a diet that’s impossibly difficult to follow and prone to malnourishment should be adopted by everyone.

“It also comes down to the names of the products themselves. If (whatever substance of the moment) is put in front of the word ‘milk,’ then a false impression of nutritional equivalence, if not superiority, is easy to create.”