You’ll recall December milk production was down 0.3 percent from a year ago, but the December Dairy Products report shows that plenty of milk found its way to the cheese vat and the butter churn.

December U.S. cheese production totaled 1.21 billion pounds, up 4.4 percent from November, and 0.9 percent above December 2022. Output for all of 2023 amounted to 14.1 billion pounds, up 0.3 percent from 2022.

Wisconsin produced 300.4 million pounds of December’s total, up 2.9 percent from November and 0.6 percent above a year ago. California contributed 214.6 million pounds, up 2.1 percent from November and 2.7 percent above a year ago. Idaho, with 88.8 million, was up 15.6 percent from November and 2.6 percent above a year ago. New Mexico, at 89.8 million, was up 17.7 percent from November and 7.7 percent above a year ago.

Italian cheese totaled 509.5 million pounds, up 4.9 percent from November and 0.3 percent above a year ago. 2023 output, at 5.9 billion pounds, was down 0.7 percent from 2022.

American output hit 488.1 million pounds, up 5.9 percent from November and 0.5 percent above a year ago. The total for the year was 5.7 billion pounds, up 1.4 percent.

Mozzarella totaled 403.6 million pounds, up 1.0 percent from a year ago, with 4.6 billion pounds being produced in the year, off 0.1 percent from 2022.

Cheddar output shot up to 336.5 million pounds, up 22.2 million pounds or 7.1 percent from November output, which was revised down 8.3 million pounds, and was down 6.7 million or 2.0 percent, from a year ago. Cheddar output for the year totaled just under 4.0 billion pounds, up 0.6 percent from 2022.

Butter production climbed to 196.3 million pounds, up a hefty 30.5 million pounds or 18.4 percent from November, and up 8.3 million pounds or 4.4 percent from a year ago. Butter output totaled 2.1 billion pounds in 2023, up 2.7 percent from a year ago.

Yogurt totaled 369.0 million pounds, down 0.6 percent from a year ago, with output for the year hitting 4.8 billion pounds, up 3.0 percent.

Dry whey production climbed to 70.4 million pounds, up 3 million pounds or 4.5 percent from November, but 4.5 million pounds or 6.1 percent below year ago. Output for 2023 totaled 926.5 million pounds, up 1.2 percent. Stocks slipped to 69.4 million pounds, down 1.7 million or 2.4 percent from November and 100,000 pounds or 0.2 percent below a year ago.

The Daily Dairy Report said, “The whey stream was drawn toward manufacturing whey protein isolates and whey protein concentrates with more than 50 percent protein, production of which were up 14.9 percent and 12 percent, respectively. This trend, which has held for several months, has likely led to diminished dry whey stocks, helping drive spot prices above 50 cents per pound for the first time since mid-2022.”

Nonfat dry milk output shot up to 146.4 million pounds, up 30.7 million or 26.5 percent from November but was down 21.3 million or 12.7 percent below a year ago. Powder output in 2023 fell to 1.9 billion pounds, down 4.6 percent from a year ago. Stocks slipped to 203.3 million pounds, down 2.7 million pounds, or 1.3 percent from November, and were down 52.4 million pounds or 20.5 percent from a year ago.

Skim milk powder production fell to 48.3 million pounds, down 8.6 million pounds or 15.1 percent from November, and 15.5 million or 24.3 percent below a year ago. Output for the year totaled 548.5 million pounds, down 16.6 percent from a year ago.

Culling continues to lag. The week ending Jan.27 saw 60,100 head go to slaughter, up 9,000 from the previous week, but 8,400 or 12.3 percent below a year ago. Thus far, 215,700 head have been culled, down 57,200 or 21 percent from a year ago.

The USDA lowered its milk production forecast for the fourth time in its latest World Agriculture Supply and Demand Estimates report. The 2024 forecast was reduced due to lower expected output per cow, which is partly offset by higher cow inventories.

2024 production and marketings were projected at 228.2 and 227.2 billion pounds respectively, down 100,000 pounds on both from last month’s estimate. If realized, both would be up 1.6 billion pounds or 0.7 percent from 2023.

Cheese, butter, nonfat dry milk, and whey price forecasts were raised based on recent price strength, tighter supplies of milk, and stronger domestic use. Class III and Class IV milk prices were also raised accordingly.

The 2024 Class III price is projected to average $17.10 per cwt., up $1 from last month’s estimate, and compares to $17.02 in 2023 and $21.96 in 2022.

The Class IV price is estimated to average $20.20, up 85 cents from a month ago, and compares to $19.12 in 2023 and $24.47 in 2022.

Looking at the crop side of the report, the corn outlook is for lower food, seed, and industrial use and larger ending stocks. Ending stocks were up 10 million bushels from last month. The season-average corn price was unchanged at $4.80 per bushel.

The soybean outlook is for lower exports and higher ending stocks. Exports were forecast at 1.72 billion bushels, down 35 million from last month, reflecting the slow pace of shipments through January and strong competition with Brazil. Ending stocks were forecast at 315 million bushels, up 35 million. The season-average soybean price was forecast at $12.65 per bushel, down a dime from last month. Soybean meal was unchanged at $380 per short ton.

After gaining 20.50 cents the previous two weeks, cash block Cheddar headed south, closing Friday at $1.57 per pound, down 8 cents on the week and 29.25 cents below a year ago.

The barrels climbed to $1.59 Monday, highest since Dec. 6, 2023, but finished Friday at $1.5775, 2.75 cents higher on the week, 0.25 cents above a year ago, and 0.75 cents above the blocks. There were two sales of block on the week and nine of barrel.

Cheddar demand is slower according to Midwest contacts, said Dairy Market News. Grocers’ orders are reportedly seasonally quieter. Some cheesemakers say inventories are growing. Milk availability is snug compared to a few weeks ago and some noted a marked downturn in component levels in that timeframe. Vats are busier and will likely remain so through the spring holiday, DMN said.

Retail cheese demand in the West is steady to weaker, with food service steady to moderate. International purchases are steady. Milk is tighter, according to some, but loads are available. Cheese output is stronger to steady, DMN said.

News was mixed on the export front. December sailings dropped 5 percent, and down for the 11th month in a row, although HighGround Dairy’s Alyssa Badger pointed out in the Feb. 12 “Dairy Radio Now” broadcast that the decrease was the smallest since March, indicating that things may turn positive in 2024.

For the year, the U.S. shipped just over 5.8 billion pounds of product, down 7.3 percent from 2022, and the lowest since 2020, but historically Badger said it was one of the strongest years as we set a record in 2022, so 2023 was the third highest.