Butter and cheese stocks fell in October, with the cheese inventory down for the eighth month in a row. The USDA’s latest Cold Storage report showed Oct. 31 butter holdings at 267.5 million pounds, down 35.8 million pounds or 11.8 percent from the September inventory, which was revised up 355,000 pounds. They were up 27.4 million pounds or 11.4 percent however from October 2023.

American type cheese stocks fell to 772.7 million pounds, down 9.6 million or 1.2 percent from the September level, which was revised 461,000 pounds lower, and were down 61.2 million pounds or 7.3 percent from a year ago.

The “other” cheese category holdings dipped to 547.2 million pounds, down 16.4 million pounds or 2.9 percent from the September level, which was revised 6.9 million pounds lower, and were down 56.8 million pounds or 9.4 percent from a year ago.

The total cheese inventory on Halloween had fallen to 1.34 billion pounds, down a bullish 26.3 million pounds or 1.9 percent from September, and was 116.1 million pounds or just under 8 percent below that of a year ago.

Cheese exports, thanks to U.S. competitive prices, have helped offset sluggish domestic demand however, increasing cheese making capacity may temper this data in the months to come.

StoneX broker Dave Kurzawski stated in the Dec. 2 Dairy Radio Now broadcast; “The report was bullish but the market presently has been anything but.” The cheese inventory came lower than expected, he said, so, “We’re running very lean on cheese inventories and it’s hard to square that with a $1.65 or $1.70 per pound cheese price.” Cheese stocks at these levels would argue for a CME price of around $2, he said, so we’re 30 to 40 cents undervalued. 

New capacity coming on line maybe influencing prices, he said. Exports are strong and we are poised for even more, considering U.S. cheese at sub $1.70 is probably the cheapest in the world. He expects exports will continue to build but that may be impacted by tariffs which incoming President Donald Trump has threatened.

He said Trump may carve out some kind of deal even before he takes office because he doesn’t think Trump wants to be punitive to Mexico or Canada specifically. He may simply be trying to message China. “We just don’t know what this is going to look like,” he concluded. “The futures market is probably worried about it but not really behaving that way.”

Fluid milk sales, after topping year ago levels in five out of the first eight months of 2024, backtracked in September, according to USDA’s latest data. September packaged sales totaled 3.5 billion pounds, down 1.6 percent from September 2023.

Conventional product sales totaled 3.2 billion pounds, down 2.3 percent from a year ago. Organic products, at 249 million, were up 9.1 percent however, and represented a typical 7.1 percent of total sales for the month.

Whole milk sales totaled 1.2 billion pounds, down 1.2 percent from a year ago, but up 2.0 percent year to date, and represented a typical 34.5 percent of total sales for the month.

Skim milk sales, at 150 million pounds, were down 10.5 percent from a year ago and down 11.4 percent YTD.

Packaged fluid sales in the nine-month period totaled 31.8 billion pounds, up 0.9 percent from 2023. Conventional product sales totaled 29.6 billion pounds, up 0.4 percent from a year ago. Organic products, at 2.3 billion pounds, were up 6.9 percent, and represented 7.1 percent of total milk sales in the nine months.

The figures represent consumption in Federal market order, which account for about 92 percent of total fluid sales in the U.S.

The good news is that Americans consumed record amounts of dairy products in 2023, led by surging demand for butter and cheese, according to the International Dairy Foods Association.

The UDSA reported this week that per capita consumption of dairy products reached 661 pounds per person in 2023, an increase of 7 pounds per person over the previous year and matching the all-time record set in 2021.

Butter and cheese consumption surpassed previous records, says the IDFA, reaching all-time highs of 6.5 pounds of butter and 42.3 pounds of cheese per person in 2023. For context, a typical package of butter containing four sticks weighs 1 pound and a standard bag of shredded cheese is half a pound.

Cottage cheese continues to win back shoppers, notching 2.1 pounds per person in 2023, a level not seen since 2019, and yogurt saw consumption increase from 13.5 pounds per person to 13.8 pounds in 2023, a 2 percent increase.

Fluid milk and ice cream consumption fell in 2023, although year-to-date sales in 2024 is showing strength.

The IDFA reports that, in the past decade alone, domestic per capita consumption of cheese is up 19 percent and butter consumption is up 18 percent. In the past 20 years, yogurt consumption has grown 60 percent.

Overall, USDA data shows Americans’ per capita consumption of dairy is up 3 percent over the past five years, 9 percent over the past 15 years, and 16 percent over the past 30 years, according to the IDFA.

Cash dairy prices were mostly lower in the shortened week of Thanksgiving. After jumping a nickel on Monday to $1.6950 per pound, the Cheddar blocks closed Wednesday at $1.6425 per pound, down a quarter-cent on the week, but 12.25 cents above a year ago.

The barrels finished at $1.6050, down 4.50 cents, lowest since April 15, 8.50 cents above a year ago, and 3.75 cents below the blocks. Sales for the three days totaled one load of block and 38 for the month of November, down from 57 in October. There were 10 loads of barrel on the week and 27 for the month, down from 28 in October.

Midwest cheese plants were running relatively normal schedules this week, minus the holiday, according to Dairy Market News. More milk was available, as is typically the case during a holiday week, but some plants said their extra milk was light in comparison to Thanksgiving week in previous years. Some plants were looking for more milk if the price was right. Cheese markets are still uncertain moving toward the final month of the year. Barrel makers say demand has been a little less robust in recent weeks. Some retail Cheddar and Italian style cheesemakers have been running active schedules to meet demand, says DMN, and were expecting a quick return to that following the weekend.

Western cheese production was mostly steady through the holiday week. Milk volumes were indicated to be tight for some parts of the region, but cheese manufacturers note Class III milk was ample. Domestic cheese demand is reported to be steady. Domestic prices continue to have a competitive edge to international prices, which is helping to draw international buyer interest. Export demand is steady and there’s plenty of cheese available, according to DMN.

Cash butter saw its Wednesday close at $2.4925 per pound.