September milk production was down 0.2 percent from a year ago and September’s Dairy Products report shows that milk was directed to the churn. StoneX says there was more fat and protein in the milk, along with declining fluid milk sales, so the amount of solids available to turn into dairy products was up about 1.1 percent.

Cheese production totaled 1.152 billion pounds, down 0.3 percent from August but 0.1 percent above September 2022, first month to top a year ago since June. Output in the first nine months totaled 10.55 billion pounds, up just 0.2 percent from 2022.

Italian cheese totaled 479.5 million pounds, down 0.9 percent from August and 3.4 percent below a year ago. American output, at 465.8 million pounds, was up 1.6 percent from August and 4.2 percent above a year ago. Mozzarella totaled 380.5 million pounds, down 1.3 percent from a year ago.

Cheddar, the cheese traded at the CME, totaled 314.6 million pounds, up 1.4 million pounds or 0.4 percent from August, and 9.4 million pounds or 3.1 percent above a year ago. YTD output hit 3.0 billion pounds, up 1.8 percent from 2022.

Butter production climbed to 144.6 million pounds, up 4.6 million pounds or 3.3 percent August, and up 4 million pounds or 2.9 percent from a year ago. YTD butter stood at 1.6 billion pounds, up 3.5 percent from a year ago.

Yogurt production totaled 416.3 million pounds, up 4.6 percent from a year ago, and hard ice cream output, at 61.9 million pounds, was down 1.9 percent from 2022.

Dry whey production totaled 76.2 million pounds, down 6.6 million pounds or 7.9 percent from August, but 400,000 pounds or 0.5 percent above year ago. Stocks fell to 83.4 million pounds, down 5.1 million or 5.8 percent from August but 16.6 million pounds or 24.8 percent above those a year ago.

Nonfat dry milk output fell to 101.1 million pounds, down 9.8 million or 8.8 percent from August, and down 21.8 million or 17.7 percent from a year ago. Stocks fell to 243.6 million pounds, down 25.8 million pounds or 9.6 percent from August, and down 29.6 million pounds or 10.8 percent from a year ago.

Skim milk powder production slipped to 55.7 million pounds, down 3.9 million pounds or 6.6 percent from August, and 12.7 million or 18.7 percent below a year ago.

The USDA lowered its milk production forecasts for 2023 and 2024 in the latest World Agriculture Supply and Demand Estimates report. The 2023 forecast was reduced from last month as milk cow numbers were revised lower in the latest Milk Production report, and the lower estimated numbers were carried into the fourth quarter forecast. Growth in milk per cow was also slowed in the fourth quarter with slower-than-expected growth for third quarter. The 2024 milk forecast was reduced as the lower forecasts of milk cows and milk per cow for late 2023 are carried into 2024, according to the USDA.

2023 production and marketings were estimated at 227.1 and 226.1 billion pounds respectively, down 500 million pounds on both from a month ago. If realized, both would be up 600 million pounds or 0.3 percent from 2022.

2024 production and marketings were projected at 230.0 and 229.1 billion pounds respectively, down 400 million pounds on production and 300 million on marketings. If realized, 2024 production would be up 2.9 billion pounds or 1.3 percent from 2023.

The 2023 Class III milk price forecast was raised on a higher expected whey price, but the Class IV price was lowered as a weaker butter price more than offsetting slightly higher NDM. The Class III is projected to average $17.10 per hundredweight, up a nickel from last month’s estimate, and compares to $21.96 in 2022 and $17.08 in 2021. The 2024 average was estimated at $17.70, up 50 cents from last month’s estimate.

The 2023 Class IV price was projected to average $19.20, down a nickel from a month ago, and compares to $24.47 in 2022 and $16.09 in 2021. The 2024 average, at $18.85, was raised a nickel from last month’s projection.

Meanwhile, the latest Crop Progress report shows the U.S. corn harvest was 81 percent complete, as of the week ending Nov. 5, up from 71 percent the previous week, 4 percent behind a year ago, though 4 percent ahead of the five-year average.

Soybeans were 91 percent harvested, up from 85 percent the previous week, 2 percent behind a year ago, but 5 percent ahead of the five-year average.

The week ending Oct. 28 saw 55,500 dairy cows go to slaughter, up 800 from the previous week, but 3,900 or 6.6 percent below a year ago. Year to date 2,601,000 head have been retired from the dairy business, up 80,000 or 3.2 percent from a year ago.

CME block Cheddar saw a third consecutive week of decline, closing the second Friday of November at $1.60 per pound, down 6.50 cents on the week, lowest since July 19, and 60 cents below a year ago when it jumped 19 cents hitting $2.20.

The barrels fell to $1.5450 Tuesday, lowest since Oct. 4, but closed Friday at $1.65, up a penny on the week, 41.25 cents below a year ago, and an inverted 5 cents above the blocks. 15 cars of block and 20 of barrel were sold.

U.S. dairy exports were hurting again in September, registering the smallest total since February and the smallest September value since 2020, according to HighGround Dairy economist Betty Berning in the Nov. 13 “Dairy Radio Now” broadcast. The U.S. exported 16.4 percent of its total milk solids, down 12 percent from September 2022, according to HGD, and year-to-date, has shipped 3.7 billion pounds of solids abroad, down 7 percent from last year.

The weaker volume was due to losses in skim and nonfat dry milk, butter, and whey, says HGD. Exports to Southeast Asia saw the smallest number since December 2018, shipments to Mexico fell for the first time since July 2022, and exports to China were below a year ago for the sixth consecutive month.

HGD warned, “With Mexican buying slowing, there are reasons to believe dairy prices could move lower in the near term. Year-to-date, the U.S.’ southern neighbor had been the savior of the export market and is on-track to set an annual record, but with the peso weakening since the summer, this may no longer be the case. Without robust demand from Mexico, U.S. exports may fall further in the coming months.”

Dry whey exports were down 31.2 percent, the sixth consecutive month of year-over-year losses, due to smaller demand from China, Indonesia and Malaysia.

Butter exports were down 57.3 percent from a year ago. No surprise there for the highest priced product in the world, but that high price also acted as a magnet to imports which were up 5.7 million pounds, says HGD, adding that “Export recovery does not look likely for the foreseeable future.”

Berning said, “The wind in the sails” may be cheese. Exports were up 4.3 percent and up for the second month in a row, thanks to demand from Mexico, China and Canada. “Perhaps international demand for cheese is improving,” she concluded.