The Agriculture Department left its 2023 milk production forecast unchanged in its latest World Agricultural Supply and Demand Estimate report but lowered the 2024 estimate, citing lower cow inventories and slower growth in milk per cow.

2023 production and marketings were estimated at 228.4 and 227.4 billion pounds respectively, unchanged on both from a month ago. If realized, both would be up 1.9 billion pounds or 0.84 percent from 2022.

2024 production and marketings were projected at 230.6 and 229.6 billion pounds respectively, down 200 million pounds on both. If realized, 2024 production and marketings would be up 2.2 billion pounds or 0.96 percent from 2023.

Fat basis exports for 2023 were lowered primarily reflecting lower butter and cheese shipments. Skim-solids basis exports, also lowered, reflect lower exports of whey products as well as a number of other dairy products; however, these declines are partially offset by higher nonfat dry milk (NDM) exports.

Fat basis exports for 2024 were reduced as USDA expects weakness in butter sales to carry into the next year. Skim-solids basis export reductions were largely due to lower expected lactose exports, according to the WASDE.

Imports on a fat basis for 2023 were unchanged with largely offsetting changes for a number of products, but skim-solids imports were lowered on lower milk protein concentrates. Imports for 2024 on both a skim-solids basis and a fat basis were lowered slightly.

Projected 2023 cheese, NDM, and whey price averages were lowered from a month ago based on continued ample supplies of cheese and competition in international NDM and whey markets. Butter was unchanged.

The 2023 cheese average was lowered to $1.6750 per pound, down 5.50 cents from a month ago, and compares to $2.1122 in 2022 and $1.6755 in 2021. The 2023 average was lowered to $1.69, down 8.50 cents from last month’s estimate.

Butter was projected at $2.4350 for 2023, unchanged from last month’s estimate and compares to $2.8665 in 2022 and $1.7325 in 2021. The 2024 average was raised to $2.3450, up a penny from a month ago.

Nonfat dry milk will average $1.17 per pound in 2023, down 20 cents from last month’s WASDE, and compares to $1.6851 in 2022 and $1.2693 in 2021. The 2024 average will fall to $1.1250, down 50 cents from last month’s estimate.

The Class III milk price forecast was reduced due to weaker cheese and whey prices and the Class IV decline reflects lower NDM prices. The 2023 Class III will average $16.05 per hundredweight, down 65 cents from last month’s estimate, and compares to $21.96 in 2022 and $17.08 in 2021. The 2024 average will fall to $15.95, down $1.05 from last month’s estimate.

The 2023 Class IV is expected to average $18.20 per cwt., down 15 cents from last month’s call, and compares to $24.47 in 2022 and $16.09 in 2021. The 2024 Class IV will average $17.45, unchanged from last month’s projection.

Cheese prices oscillated some the second week of July but moved higher. After gaining 5.75 cents the previous week, the Cheddar blocks climbed to $1.53 per pound Thursday, highest since May 24, but closed Friday at $1.48, up 8.75 cents on the week and 51.50 cents below a year ago when they dropped 11.50 cents to $1.9950.

The barrels climbed to $1.42 Tuesday, highest since June 26, lost 3 cents Wednesday, and finished Friday at $1.3925, 1.25 cents higher on the week, 67.75 cents below a year ago, and 8.75 cents below the blocks. CME sales for the week totaled 22 cars of block and 53 of barrel.

Midwestern cheesemakers report a continuance of hearty demand, says Dairy Market News. Retail Cheddar-American style cheesemakers say customers have ramped up ordering and plants are pushing capacity limits to meet customer needs. Barrel producers report similar notes. Any extra loads are moving, says DMN, and concerns about warehouse space are noted but some of that is based on cheese that requires more aging time. Milk remains available in the Upper Midwest, but the farther south you go the tighter the milk. Spot prices continue at double-digits below Class III but some have been reported at Class in the central-southern states. Contacts expect seasonal milk supply limitations to hamper upcoming production and potentially boost market prices, says DMN.

Western food service cheese demand is steady while retail is steady to moderate. Sources note strong cottage cheese and cream cheese sales thus far for the year. Manufacturers of frozen pizzas report less demand for third quarter than a year ago which is negatively impacting mozzarella sales. Loads are available to meet demand with some reports of higher warehouse capacities. Class III milk is ample for strong for the vat. Export demand is mixed. Interest from Asian and Mexican purchasers is moderate, according to DMN.

Cream has begun its seasonal disappearing act in terms of affordability for churning, says DMN, and some expect limits on spot cream for the remaining summer months. Warmer temperatures are hampering milk output, in general, and southern plants are vying for more Upper Midwestern cream. That said, there are Upper Midwest butter plants reporting cream availability is not as tight. They point out that current cream access this late into summer is unique to 2023.

Cream is tighter in the southern areas of the West with California joining the triple degree temperature club. Cream is available throughout the West and meeting manufacturers’ needs. Some relay that cream demand from ice cream makers is below last year levels but expect warmer weather to change that while others expect Class II draws to decline further. Butter production is steady to lighter. Retail and food service butter demand is strong to steady though some report fourth quarter buying is comparatively lighter than third quarter thus far.

Last of all, a call to support and promote a bipartisan measure to expand healthy milk varieties for schools to choose. Claudia Larson, NMPF senior director of government relations, says “The Whole Milk for Healthy Kids Act, which would return whole and 2 percent milk to school lunch menus, has been introduced in the past. But with a growing tide of science to back up its benefits, this year the legislation has advanced farther than ever before, with a possible House floor vote as early as this month. House Agriculture Committee Chair GT Thompson (R-Pa.), Rep. Kim Schrier (D-Wash.), and Sens. Roger Marshall (R-Kan.) and Peter Welch (D-Va.) are leading the effort,” says NMPF.

“Allowing schools to serve 2 percent and whole milk is a commonsense solution to a national child nutrition problem,” writes Larson. “No other food delivers the same rich and unique nutrition package as milk, which provides 13 essential nutrients, including three of the four public health concerns. Milk plays an especially significant role in providing the nutrition critical for childhood health and development. Milk is the number one source of protein for kids 2 to 11, serves as the top source of calcium, potassium, phosphorus, and vitamin D for children ages 2 to 18, and provides seven of the 14 nutrients the American Academy of Pediatrics recommends for optimal brain development.” Write your elected officials. Tell your friends and neighbors. If famers won’t, who will?