You’ll recall April milk production was only up 0.3 percent from 2022. The April Dairy Products report shows that most of the extra milk went to the churn.

Cheese production totaled 1.171 billion pounds, down 4.9 percent from March and 0.2 percent below April 2022, the second month in 2023 with a year over year decline. Output for the four-month period hit 4.7 billion pounds, up just 0.7 percent from the same period a year ago.

Italian cheese totaled 478.3 million pounds, down 6.7 percent from March and 2.6 percent below a year ago. American output fell to 488.2 million pounds, down 2.1 percent from March but up 2.3 percent from a year ago. Mozzarella totaled 381.7 million pounds, down 1.3 percent from a year ago. Lower Mozzarella output is likely due to weaker exports, says StoneX, and may have pushed more milk into Cheddar production.

Cheddar has been under pressure at the CME. Output slipped to 346.2 million pounds, down 2 million or 0.6 percent from March but up 19 million pounds, or 5.8 percent, from April 2022. YTD Cheddar stood at 1.37 billion pounds, up 4.1 percent from 2022.

Butter output fell to 195.0 million pounds, down 10 million pounds or 4.9 percent from March but was up 13.7 million pounds or 7.6 percent from a year ago. YTD butter output stood at 788.5 million pounds, up 3.3 percent from a year ago.

The June 5 Daily Dairy Report says “Churns in the Central region ran particularly hard as butter output in that area climbed 13.7 percent. However, butter production in the Atlantic and Western regions were also up by 4.6 percent and 3.8 percent respectively.”

Yogurt production totaled 385.6 million pounds, up 3.1 percent from a year ago, and hard ice cream output slipped to 61.4 million pounds, down 6.1 percent from 2022.

Dry whey production totaled 80.8 million pounds, up 3.3 million pounds or 4.2 percent from March and up 1.4 million pounds or 1.7 percent above year ago. YTD whey is at 302 million pounds, up 1.2 percent.

Nonfat dry milk output inched up to 199.6 million pounds, up 200,000 pounds or 0.1 percent from March and up 3.8 million or 1.9 percent from a year ago. Stocks slipped to 309.2 million pounds, down 3.4 million pounds, or 1.1 percent from March.

U.S. nonfat is the cheapest on the world market, says StoneX, so that should continue to help exports.

Skim milk powder production totaled 34.5 million pounds, down 800,000 pounds or 2.1 percent from March, and 10.1 million pounds or 22.6 percent below a year ago.

Speaking of exports, April data shows they are having a tough time keeping pace with prior year levels, according to HighGround Dairy, with a notable shift lower continuing to be observed to South Korea and Southeast Asia.

Cheese exports totaled 80.5 million pounds, down 11.7 percent from 2022. South Korea recorded the largest drop, says HGD, while losses to Southeast Asia were primarily nonfat-skim milk powder. “Losses to Asia have dominated the narrative, though gains were noted to Latin America, primarily nonfat dry milk to Mexico.”

As I have said in the past, China remains the elephant in the room in world trade and it is not fully engaged yet, but that may be changing. StoneX June 5 ‘Early Morning Update’ reported, “Chinese milk production has slowed down even faster than expected. Reported milk collections in April were only up 1.7 percent from last year after averaging 11 percent growth in January and February. Farm gate margins are at a record low and spot milk prices remain under pressure. The slowdown in reported milk collections is theoretically supportive for the global dairy markets and it is worth watching as a bullish risk, but even at 1.7 percent growth the Chinese market seems to be oversupplied.”

Broker Dave Kurzawski added in the June 12 ‘Dairy Radio Now’ broadcast that the fallback in exports is in line with other commodities reported in the Consumer Research Bureau, plus China has a different mindset post COVID than the U.S. Their economy is not bouncing back like we thought it would six months ago, he said. People there are not spending money like here in the U.S. They’re nervous about their jobs and the economy and are putting money away, not spending it.

Whole milk powder provided a downward pull in the June 6 Global Dairy Trade auction. The weighted average was down 0.9 percent, following the 0.9 percent decline on May 16. Just under 51 million pounds of product was sold, up from 47.5 million on May 16. The average metric ton price slipped to $3,399 U.S., down from $3,488.00 on May 16.

StoneX says the GDT 80 percent butterfat butter price equates to $2.2514 per pound U.S., up 0.8 cents, and compares to CME butter which closed Friday at $2.3625. GDT Cheddar, at $2.1175, was up 11.8 cents, and compares to Friday’s CME block Cheddar at $1.4225. GDT skim milk powder averaged $1.2498 per pound, unchanged, and whole milk powder averaged $1.4390 per pound, down from $1.4715. CME Grade A nonfat dry milk closed Friday at $1.16 per pound.

HighGround Dairy says “The initial auction for the new dairy season in Oceania has not reignited the market’s ambition to pick a direction right away. This auction keeps the overall indicator-needle in a steady state, pointing slightly down, but within an expected range for the time being. The result could have registered lower if it were not for a few buyers chasing near term product, a factor which has also reshaped sales curves this week.”

Back home, Cheddar block cheese climbed to $1.5225 per pound Wednesday but closed Friday at $1.4225, down 0.75 cents on the week and 83.25 cents below a year ago.

The barrels made it to $1.6525 Wednesday, highest since April 6, but finished at $1.57, 5.75 cents higher but 67.25 cents below a year ago and 14.75 cents atop the blocks. Sales totaled 26 cars of block and 21 of barrel.

StoneX reports that Ukraine’s Ag Minister says the country “has a ‘plan B’ if Russia continues to block the grain export deal, excluding Russia and guaranteeing shipment via the corridor with funds built up via government coffers. Meanwhile, Russia’s foreign ministry says that inspections under the deal have resumed, but they also see ‘no prospects’ for another renewal in mid-July.”

The Agriculture Department lowered its milk production forecast in its latest World Agricultural Supply and Demand Estimate report issued Friday morning, citing slower growth in milk-per-cow than previously expected. Milk production for 2024 was unchanged from last month.

The 2023 Class III milk price average estimate was lowered to $16.70 per hundredweight, down $1.05 from last month’s projection and compares to $21.96 in 2022 and $17.08 in 2021. The 2023 average was projected at $17, down 50 cents from a month ago.

The 2023 Class IV average was $18.35, up a nickel from last month’s estimate, and compares to $24.47 in 2022 and $16.09 in 2021. The 2024 Class IV average was projected at $17.45, up a dime from last month’s estimate. I’ll have more details from the report next week.