After five consecutive gains, the Global Dairy Trade average slipped 0.5 percent Tuesday, following a 1.7 percent increase on June 4 and 3.3 percent on May 21. Volume fell to 37 million pounds, down from 38.9 million on May 21, and the lowest since May 2020. The average metric ton price inched up to $3,893 U.S., from $3,824.

GDT butter was up 6.2 percent, following a 1.7 percent rise on June 4, though anhydrous milkfat was down 1.2 percent, after inching up 0.9 percent. Lactose was up 1.9 percent, following a 1.9 percent decline, and GDT Cheddar was down 1.0 percent after inching 0.2 percent higher. Skim milk powder was up 0.7 percent, following a 3 percent jump, and whole milk powder was down 2.5 percent, after gaining 1.7 percent on June 5.

StoneX says the GDT 80 percent butterfat butter price equates to $3.2525 per pound U.S., up 21.5 cents from June 4, and compares to CME butter which closed Friday at a bargain $3.09. GDT Cheddar, at $1.9075, was down 2 cents, and compares to Friday’s CME block Cheddar at $1.8450. GDT skim milk powder averaged $1.2544 per pound, up from $1.2345, and whole milk powder averaged $1.5397, down from $1.5778. CME Grade A nonfat dry milk closed Friday at $1.2050 per pound.

The June 18 “Daily Dairy Report” stated that the GDT butter price was a record high and says “Processors on both sides of the Atlantic and in Australia are directing more milk to cheese vats and butter production has waned.

“USDA’s on-the-ground analysts project that 2024 butter production will fall 10 percent in Australia and 1.6 percent in Europe,” the DDR says, “Deficits that will be partially offset by a 2.9 percent projected increase in butter output from New Zealand. More will be needed to meet the world’s growing appetite.” Imports are adding to supplies in the U.S., DDR says, and butter production stands at all-time highs.

Fat is back in vogue, explained StoneX broker Dave Kurzawski in the June 24 “Dairy Radio Now” broadcast. Buyers are finally capitulating into having to get ownership, he said. “They’ve waited for prices to come down but they haven’t.”

It’s not a milk supply situation in that part of the world or even in Europe, he said, as European output seems to be doing better, unlike the U.S. where seasonal weather may be impacting output. Our big problem is avian flu, he said. “It’s alive and well in the U.S. and knocking down milk production and something we’re going to be dealing with for a while.” There’s no word of it showing up in Canada or Mexico that he’s heard of yet, but “May just be a matter of time,” he concluded.

Meanwhile, the USDA’s latest Livestock Dairy, and Poultry Outlook reported that, “As of June 14, Highly Pathogenic Avian Influenza (HPAI) was confirmed in 12 States and 101 dairy herds. Since the previous report, HPAI in dairy cows has been identified in two more states, Iowa and Wyoming. The number of affected herds has doubled. USDA maintains the mandatory testing requirements for lactating dairy prior to interstate movement and mandatory reporting of positive influenza A test results in livestock.”

The USDA announced additional details May 23 to support the dairy operations affected by HPAI and to stop the further spread. USDA launched the Voluntary H5N1 Dairy Herd Status Pilot program to increase the agency’s abilities to monitor and limit the spread of the virus. For more information, log on to the USDA, Animal and Plant Health Inspection Service website for Highly Pathogenic Avian Influenza (HPAI) Detections in Livestock.

The Outlook also mirrored milk price and production projections in the June 12 World Agricultural Supply and Demand Estimates report and stated “While milk production on a per day basis has been declining year over year for 10 consecutive months, the production of milk fat continued to increase. Concurrently, skim solids have decreased year over year in most months, although in April they were up 0.2 percent from April 2023. Higher concentrations of fat, protein, and other solids (lactose and minerals) reduces the amount of milk required for manufacturing dairy products,” the Outlook reported.

The dairy herd forecast for 2024 was 9.345 million cows, unchanged from last month’s forecast. The forecast milk yield per cow is 24,320 pounds, 10 pounds less than last month’s forecast. Cow numbers for 2025 were raised 5,000 from the previous forecast to 9.37 million, while yield per cow was lowered 15 pounds to 24,470 pounds.

Cash dairy prices in the Juneteenth holiday-shortened week were mixed as traders awaited Friday afternoon’s May Milk Production report. StoneX expects output to be down 0.5 percent but adds, “Even with headline milk production down 0.5 percent that would still leave component adjusted production up about 1.3 percent thanks to strong year-over-year gains in fat and protein in the milk for May.”

The Cheddar blocks closed Friday at $1.8450 per pound, down 12.50 cents on the week, but still 44 cents above a year ago. The barrels saw their Friday finish at $1.92, 10 cents lower, lowest since May 10, but 42 cents above a year ago and 7.50 cents above the blocks. Sales totaled 34 loads of block and 24 barrel.

Summer heat is no doubt taking a toll on cow comfort and milk output, adding to the losses incurred by avian influenza. Most Midwest and Central cheese contacts tell Dairy Market News that cheese demand is holding strong. Early in the week, milk availability was reported to be steady with previous weeks.

Western cheese production remains steady or lighter. Milk demand from cheese manufacturers is steady though milk volumes have become tighter as output is decreasing to various degrees. Heat levels have contributed to some unplanned downtime, says DMN. Domestic cheese demand is steady. Export demand is in line with recent weeks but less hearty than domestic demand.

CME butter jumped 1.75 cents Monday, fell to $3.08 Thursday, then closed Friday at $3.09, unchanged on the week, but 67 cents above a year ago, with 12 sales for the short week.

Cream continues to tighten in the Midwest and Central region, says DMN. Some butter plant managers say they are waiting for the Fourth of July holiday to see about getting more enticing spot offers, but “current prices continue to edge out of their fiscal realm.” Plant churning rates are holding, though they do not expect this to last much longer. Current production is focused on upcoming seasonal demand which is expected to pick up later in the summer and early fall. Current butter availability is in some balance for 80 percent salted loads, but notably limited for 82 percent varieties. As cream begins to tighten throughout the region, even 80 percent butterfat loads are expected to tighten. Increasing ice cream production is also puling cream away from the churns.

Churning is mostly steady in the West. A few manufacturers were making a final push before shuttering their plants for lengthy maintenance. Retail and bulk production lines are running to various degrees. Sources says salted butter is plentiful however unsalted bulk butter is tight. Cream availability continues to tighten in some parts but volumes are meeting needs.