U.S. Milk Production Estimates Raised for 2021 - Cowsmo

U.S. Milk Production Estimates Raised for 2021

The Agriculture Department raised its estimate on 2021 milk production and gave us our first peak at 2022 output in the latest World Agricultural Supply and Demand Estimates.

The report cited higher cow inventories for the gain in 2021 output and continued gains in milk per cow more than offsetting a slight reduction in the dairy cow herd for 2022.

2021 production and marketings were estimated at 227.9 billion and 226.8 billion pounds, respectively, up 200 million pounds on production and 100 million pounds on marketings.

If realized, 2021 production would be up 4.7 billion pounds, or 2.1% from 2020.

2022 production and marketings were estimated at 230.3 billion and 229.2 billion pounds, respectively. If realized, 2022 production would be up 2.4 billion pounds, or 1.1% from 2021.

The 2021 Class III milk price average was pegged at $17.70 per cwt., up 60 cents from last month’s estimate, and compares to $18.16 in 2020 and $16.96 in 2019. The 2022 average is projected at $16.85, due to expected weaker cheese and whey prices.

The 2021 Class IV price is estimated to average $15.75, also up 60 cents from a month ago, and compares to $13.49 in 2020 and $16.30 in 2019. The 2022 average was projected at $15.70, as lower NDM prices more than offsets higher butter prices.

Tuesday’s Livestock, Dairy, and Poultry Outlook stated: “The U.S. milking herd is projected to average 9.465 million head in 2022, 5,000 less than the 2021 projection. Some contraction is expected due to relatively high feed prices and weaker milk prices. Milk per cow was projected to average 24,335 pounds per head, a year-over-year increase of 1.1%.”

Looking for direction
Cash dairy prices looked for direction last week as talk escalated of rising inflation in the U.S. and the resulting shortages of various commodities sought by many consumers with plenty of cash due to government’s “generosity.”

The Cheddar blocks started the week falling 2 cents, then climbed to $1.8125 per pound on Wednesday, but ended Friday at $1.7250, down 2.25 cents on the week and 5.50 cents below a year ago when they pole vaulted 47.50 cents.

The barrels fell to $1.69 per pound last Tuesday, hit $1.78 Thursday, but closed Friday at $1.73, 0.25 cents higher on the week and a penny above a year ago when they gained 45 cents. The week saw 35 cars of block find new homes, highest since the week of Jan. 4, 2021, and 19 of barrel.

Last week’s price reversal continued Monday as traders took the blocks down 4.25 cents and shaved off a nickel Tuesday, dipping to $1.6325, as they anticipated Thursday’s April Milk Production report. This is the lowest block price since March 2, 2021.

The barrels were down 3 cents Monday and plunged 7.25 cents Tuesday on 16 trades, falling to $1.6275, lowest since April 8.

Some cheese plants have run six-day workweeks throughout 2021 to keep up with orders, according to Dairy Market News, and milk availability is “holding steady,” with some expectations that milk will remain plentiful until the Memorial Day holiday.

School districts in parts of the region are finishing up the schoolyear and, even as flush milk levels start to decline, more milk will move into cheese production, says DMN, so cheese market tones are “uncertain.”

Western retail cheese demand is holding steady with mixed reports on food service demand. There is steady demand for cheese for export to Mexico and Asia. The driver and truck shortage was increasing freight costs and are a concern for cheese buyers, warned DMN. With the high availability of milk in the region cheese plants are running full schedules.

Dairy farmers remain grateful to pizza, in particular pizza restaurants, which have upheld cheese sales. Pizza outlets fared the best in the COVID-driven demise of a huge percentage of U.S. restaurants that closed their doors last year.

The pizza industry is still doing well. The May 7 Dairy and Food Market Analyst reported that “Papa John’s system-wide sales were up 26% year over year in North America and up 23% in international markets. Compared to two years ago, North American sales grew by 33% and international sales increased by 26%. Domino’s said their sales were up 15% YOY in the USA and up 13% in international markets during the quarter.”

Cash butter had a good week climbing daily to a Friday close of $1.8750 per pound, up 10.50 cents and 23 cents above a year ago when it gained 35.50 cents. There were 5 sales reported last week.

Monday’s butter was down 5.25 cents, first slippage in 8 sessions, but regained 3 cents Tuesday on 2 unfilled bids, hitting $1.8525.

Butter producers tell DMN that inquiries for bulk salted butter have increased. Cream is not regarded as tight but butter plant managers do not report it as loose, either. Some butter makers are clearing cream from Western suppliers. Food service butter demand has rebounded some but general demand is mixed as retail sales are seasonally quiet.

Cream is steady in the West, says DMN, albeit gradually constricting as ice cream makers absorb ample volumes. Some ice cream makers say they are facing both high year-over-year and seasonal demand and cannot make enough ice cream.

Some butter manufacturers are selling a few loads of cream. Others, particularly in the Southwest, are maintaining seasonally active butter output, trying to stash extra butter for later this year, when cream may be harder to come by. Inventories throughout the region are stable. Retail demand is steady to lower. Food service orders are trending strong but level.

Grade A nonfat dry milk had some ups and downs last week but softened to a Friday close at $1.30 per pound, down 2.25 cents on the week but still 36.50 cents above a year ago when it jumped 11 cents. There were 12 sales reported for the week.

The powder inched up 0.50 cents Monday and added 0.75 cents Tuesday, climbing to $1.3125 on 6 trades.

Dry whey finished last week at 64 cents per pound, up 1.25 cents and 25 cents above a year ago, with 2 sales reported at the CME.
It was unchanged Monday but was down 0.50 cents Tuesday to 63.50 cents per pound on 4 trades.

GDT down 0.2%
Once again dairy fat, particularly butter, weighed down Tuesday’s Global Dairy Trade auction. The weighted average was down 0.2%, following a 0.7% slip on May 4.

Butter led the losses, down 2.2%, after plunging 12.1% on May 4.

Anhydrous milkfat was down 0.1%, following a 4.2% drop.

Whole milk powder was off 0.2%, after inching up 0.7% last time, but skim milk powder was up 0.7%, after gaining 2.0%.

The gains were led by lactose, up 1.6%, after a 2.0% drop last time, and GDT Cheddar was up 1.0%, after dropping 4.5% last time.

StoneX Group says the GDT 80% butterfat butter price equates to $2.1814 per pound U.S., down 4.7 cents, and compares to CME butter which closed Tuesday at $1.8525.

GDT Cheddar, at $1.96, was up 2.1 cents, and compares to Tuesday’s CME block Cheddar at $1.6325. GDT skim milk powder averaged $1.5634 per pound, up from $1.5572, and whole milk powder averaged $1.87 per pound. CME Grade A nonfat dry milk closed Tuesday at $1.3125 per pound.

Fluid sales plunge 7.5%
U.S. fluid milk sales took a hit in March. USDA’s latest data shows 3.9 billion pounds of packaged fluid products were sold in the month, down 7.5% from March 2020.

Conventional product sales totaled 3.7 billion pounds, down 8.0% from a year ago. Organic products, at 255 million pounds, were up just 0.2%, and represented 6.5% of total sales for the month.

Whole milk sales totaled 1.25 billion pounds, down 14.5% from a year ago, with year to date consumption down 7.1% from a year ago. It represented 32.6% of total milk sales for the three month period.

Skim milk sales, at 224 million pounds, were down 13.9% from a year ago and down 15.5% year to date.

Total packaged fluid milk sales for the three months amounted to 11.4 billion pounds, down 5.3% from 2020. Conventional product sales totaled 10.6 billion pounds, down 5.9%. Organic products, at 736 million pounds, were up 4.8%, and represented 6.5% of total milk sales for the period.

The figures represent consumption in Federal milk marketing order areas, which account for approximately 92% of total fluid milk sales in the U.S.


Source: Lee Mielke – The Capital Press

Scroll to Top