Preliminary data from another one of the delayed U.S. Department of Agriculture reports, January Milk Production, shows output in the top 23 producing states at 17.5 billion pounds, up a bearish 1.3 percent from 2018, with the 50-state total, at 18.6 billion pounds, up 0.9 percent. Revisions added 2 million pounds to the initial 50-state December estimate, putting it at 17.1 billion pounds, up 0.8 percent from 2017.
Finalized data put total 2018 milk output at 218 billion pounds, up 1 percent from 2017. The USDA reported that annual U.S. milk output has increased 15 percent from 2009.
Cow numbers totaled 9.4 million head in 2018, down 0.1 percent from 2017, but have increased 2.1 percent from 2009. Output per cow averaged 23,149 pounds in 2018, up 235 pounds from 2017, an average that has increased 12.6 percent since 2009.
January cow numbers in the 50 states totaled 9.36 million head, down 83,000 from a year ago, seventh time cow numbers were below a year ago since May 2016. Output per cow averaged 1,988 pounds, up 35 pounds from the year before and the 39th consecutive month of gain.
California output was up 0.8 percent from a year ago, thanks to a 25-pound gain per cow outweighing 8,000 fewer cows. Wisconsin was up 2.9 percent on a 65-pound gain per cow but cow numbers were down 5,000 head.
Idaho was up 3.6 percent, thanks to 10,000 more cows and a 40-pound gain per cow. New York was up 3.4 percent, on a 60-pound gain per cow and 2,000 more cows. Pennsylvania was down for the 11th consecutive month, dropping 5.5 percent on 25,000 fewer cows and 15 pounds less per cow. Minnesota was up 1.6 percent, on a 50-pound gain per cow offsetting 5,000 fewer cows.
Michigan ended six consecutive months of declines, jumping 1.1 percent on a 55-pound gain per cow offsetting 6,000 fewer cows. New Mexico was down 3.5 percent on a 10-pound drop per cow and 10,000 fewer cows milked. Texans put 77 million pounds more in the tank than a year ago, a 7.3 percent increase, thanks to 18,000 more cows and a 75-pound per cow increase.
Dairy Market News reports that the number of milk cows in the U.S. on Jan. 1 totaled 9.35 million head, down 1 percent from the previous year. Milk cow replacement heifers totaled 4.7 million head, down 1 percent from the previous year. The percentage of milk-cow replacement heifers per 1,000 milk cows on Jan. 1 was 50.3, down 1 percent from the previous year. Milk-cow replacement heifers expected to calve during the year totaled 3.01 million head, down 1 percent from the previous year.
The Agriculture Department again lowered its 2019 milk production estimate in the latest World Agricultural Supply and Demand Estimates report, blaming smaller expected dairy cow numbers.
2019 production and marketings were estimated at 219.7 and 218.8 billion pounds, respectively, down 400 million pounds on output and down 300 million on marketings. If realized, 2019 production would still be up 2.2 billion pounds, or 1 percent, from 2018.
The fat-basis export forecast was reduced on slower expected sales of butterfat due to increased global competition. Skim-solids basis exports were lowered on expected strong competition in international skim milk powder markets and slower expected demand for whey products. The fat-basis import forecast was lowered slightly while the skim-solids basis import forecast was unchanged.
Annual product price forecasts for cheese, butter, nonfat dry milk were raised from the previous month, but the whey price forecast was reduced slightly.
The Class III milk price was raised, based on a higher cheese price projection more than offsetting the lower whey price. Look for a 2019 average of around $15.20 per hundredweight, up 15 cents from the Department’s last estimate and compared to $14.61 in 2018 and $16.17 in 2017.
The Class IV forecast was increased on higher forecast butter and nonfat dry milk prices. It’s projected at around $16.10, up 22 cents from the last projection and compares to a $14.23 average in 2018 and $15.16 in 2017.
This month’s 2018-19 U.S. corn outlook is for lower use for ethanol, reduced exports and larger stocks. Exports were reduced 75 million bushels to 2.375 billion, reflecting diminished U.S. price competitiveness and expectations of increased exports for Brazil and Argentina. The season-average corn price received by producers was lowered 5 cents at the midpoint to $3.55 per bushel.
U.S. soybean supply and use changes included higher crush and lower ending stocks compared with last month’s report. The season-average soybean price range forecast of $8.10-$9.10 per bushel was unchanged at the midpoint. Soybean oil and meal prices were also unchanged at 28.5 to 31.5 cents per pound and $295 to $335 per short ton, respectively.
Midwestern cheesemakers continue to report seasonally quiet orders, according to Dairy Market News, and some expect the lull to continue through the month. Contacts relay that their milk suppliers, smaller dairy farms, experienced barn collapses due to excess snow-builds. Cows on those farms were being relocated, but milk remains available and continues 50 cents to $2 under Class.
A number of local cheesemakers say their inventories are manageable, as they have maintained limited production schedules. However, some report recent upticks regarding production and expect it to continue forward as demand will pick up in the early spring. Cheese market tones are steady to bullish.
Are CME prices a result of the global dairy market or domestic demand? HighGround Dairy Director of Dairy Market Intelligence Lucas Fuess reported in the March 18 Dairy Radio Now broadcast that it’s a little of both.
Cheese was the only dairy commodity where U.S. disappearance grew higher vs. the prior year in December. However, good disappearance earlier in the year across all other commodities, in some cases export-driven, was enough to push total 2018 disappearance stronger year-over-year across all commodities. Total cheese disappearance was up vs. the prior year for the third consecutive month, up 1.1 percent from 2017.
Sharply higher butter disappearance in October and November did not carry over into December, with total disappearance down 7.1 percent, and marked the lowest December butter disappearance since 2012.
Domestic nonfat dry milk-skim milk powder disappearance was exceptionally sluggish, down 18.4 percent in 2018 for the lowest domestic disappearance in a calendar year since 2000. Dry whey slipped lower again in December for the sixth time in seven months, unable to continue November’s strength. Total whey protein concentrate disappearance dropped lower in December for the first time since December 2017, down 9.2 percent.