Chicago Mercantile Exchange barrel Cheddar set a record high price last week, hitting $2.6225 per pound and eclipsing the previous high of $2.53 on Nov. 2, 2020.

It closed Friday at $2.59 and was up 10.50 cents on the week, up 49 cents in four weeks, and 99 cents above a year ago.

Cheddar block, after gaining almost 24 cents the previous three weeks, headed in the other direction as new capacity comes online.

The blocks fell to $2.2450 on Wednesday, rallied Thursday but backtracked Friday to close at $2.2375, down 3.75 cents on the week, but 45.75 cents above a year ago.

The inverted spread grew to 37.75 cents Wednesday and stood at 35.25 cents on Friday, with 7 sales of block on the week and 11 of barrel.

The blocks dropped 3.75 cents Monday, with 1 load sold, and lost a penny Tuesday, slipping to $2.19, lowest since Aug. 29.

The barrels were unchanged Monday but were offered 4.50 cents lower Tuesday, slipping to $2.5450, 35.50 cents above the blocks.

Midwest cheese production remained inconsistent for the third consecutive week as multiple plants have been running lighter schedules due to maintenance or updates, says Dairy Market News.

Barrel processors have only recently been able to offer loads to customers and some say this is the first instance of extra barrels being available since the early weeks of summer, which helps explain the record price.

Milk demand from western cheese manufacturers is steady to strong. However, milk availability varied due to bottling demand and milk production dips.

Cash butter fell below $3 Thursday, first time since May 29, and closed Friday at $2.9725 per pound, down 15.75 cents on the week, and 2.75 cents below a year ago when it jumped 28.25 cents, hitting $3 per pound. There were 14 sales last week.

Monday’s butter was down 3.25 cents on 2 trades, and lost 4 cents Tuesday on a trade, dipping to $2.90, lowest since April 1.

Central butter production is busier than seasonally expected, says DMN. Cream availability remains ample within the region and from Western sources as school bottling spin-off and fat components continue to trend higher.

Butter production in the West is steady to strong. Some manufacturers continue to build inventory ahead of fourth quarter maintenance projects.

Grade A nonfat dry milk closed Friday at $1.38 per pound, down 1.25 cents on the week, but 21 cents above a year ago. There were 32 sales on the week.

Traders left the powder unchanged Monday, with 1 load sold. It lost a quarter-cent Tuesday on 7 trades, and closed at $1.3775.

Dry whey finished Friday at 58.75 cents per pound, 1.75 cents lower, but 28.50 cents above a year ago, on 12 sales for the week.

The whey was unchanged Monday but inched a quarter-cent higher Tuesday on a sale, hitting 59 cents per pound.

Milk output down 0.1%


U.S. milk production showed some signs of recovery, according to the Agriculture Department’s latest preliminary data. August output totaled 18.8 billion pounds, down just 0.1% from August 2023, the 14th consecutive month output was below a year ago, but barely. The 24-State output, at 18.1 billion pounds, was up 0.1%.

July output in the 50 states was unchanged from last month’s report while the 24-state total was reduced 1 million pounds, down 0.3% from a year ago, instead of the 0.2% decline originally reported.

August 2024 cow numbers totaled 9.325 million head, unchanged from the July count, which saw no revision, but was 40,000 head or 0.4% below August 2023. The 24-State count, at 8.878 million head, was also unchanged from July but 28,000 head or 0.3% below a year ago.

August output per cow in the 50 states averaged 2,018 pounds, up 8 pounds or 0.4% from a year ago.

StoneX says that “states that had bird flu early have fully recovered with output per cow back above a year ago in Texas, New Mexico, Michigan and Idaho. Output per cow improved in Colorado, hit hard in June and July, but it started spreading in California in mid to late August.”

The nation’s No. 1 milk producer had 34 cases confirmed, as of Sept. 20, which will likely be reflected in the September report.

California’s August production was up 67 million pounds or 2.0% from a year ago, thanks to a 45-pound gain per cow offsetting a drop of 5,000 cows.

That’s the biggest increase in two years and more than offset Wisconsin’s drop of 64 million pounds, down 2.3% from a year ago, due to a 45-pound drop per cow and 3,000 fewer cows.

Idaho was up 0.3% on 1,000 more cows and a 5-pound gain per cow.

Michigan was off 0.3% on 3,000 fewer cows but output per cow was up 10 pounds. Colorado was unchanged, despite a 20-pound loss per cow. Cow numbers were up 2,000 head.

Minnesota was down 2.8%, New York was down 1.2%, and New Mexico posted the biggest loss, down 11.3%, on a drop of 31,000 cows, although output per cow was up 5 pounds.

Oregon was down 1.4% on 2,000 fewer cows, though output per cow was up 5 pounds.

Pennsylvania was down 2.0% and South Dakota posted the biggest increase, up 8.5%.

Texans put 7.8% more milk in the tank than a year ago and 20,000 more cows in the parlor, and they gave an extra 95 pounds per cow.

Washington state was up 1.3% on 3,000 more cows. Output per cow was up 5 pounds.

Fluid sales up 4.3%

Fluid milk sales were up in July after dipping 2.9% in June. Packaged sales totaled 3.4 billion pounds, up 4.3% from July 2023. Conventional product sales totaled 3.1 billion, up 3.7%.

Organic products, at 257 million pounds, were up 11.7%, and represented 7.6% of total sales for the month.

Class I jumps $1.57

The October Federal order Class I base milk price was announced at $23.17 per hundredweight, up $1.57 from September, $3.70 above October 2023, and the highest Class I price since November 2022.

Culling well below 2023

The latest Livestock Slaughter report showed an estimated 231,300 head of dairy cows were slaughtered under federal inspection in August, up 5,400 from July, but 43,900 head or 16% below August 2023. As of the week ending Sept. 7, 1,894,100 dairy cows had been culled, down 311,700 or 14.1% from 2023.

Supply-driven market

July’s Supply and Utilization data shows that, while cheese prices saw great strength, the strength was due more to supply than demand, according to HighGround Dairy economist Betty Berning.

Speaking in the Sept. 23 “Dairy Radio Now” broadcast, Berning said American cheese utilization has been down every month of 2024, Cheddar vats have put out less product, and the tight milk supply isn’t helping.

She added, however, that fast food chain offerings have been strong and, “When you think about what goes on a cheeseburger, it’s processed cheese made with barrel cheese.”

Total domestic cheese utilization was up 0.8%, but off 0.4% year to date. Exports totaled 88.7 million pounds, up 9.6% from July 2023 and up 22.1% year to date.

“For the first time in 2024, both domestic utilization and commercial butter exports marked growth above the prior year,” according to Berning. Domestic use was up 5.5% and exports were up 15.4%.

Nonfat-skim milk powder utilization was down 19.2%, lowest since 2014. Domestic use was down 70% and year to date down 41.1%. Exports were up 10.8% in July but down 8.5% year to date. HGD attributes the higher CME prices to nervousness about the milk supply.

Dry whey usage was down 28.6% domestically, while exports were up.

Income over feed costs, while not an exact science, are headed to levels that are historically high, Berning concluded. “There’s great opportunity for producers to lock in margins into next year and ensure they can maintain profits, pay down debt, invest in operations, feed a higher quality ration, or do whatever is needed to take advantage of these very good milk prices.”

China still disappointing

China’s dairy imports were down 3.7% in August, according to HighGround Dairy, which put the year to date number down 13%.

Imports of whole milk powder (WMP) and skim milk powder were down 31.7% and 23.5% respectively. HGD says, “This is the smallest volume of WMP imported in 2024, and the smallest since October 2023.”

Whey imports were up 26.5%, with imports from the U.S. up 39.8% from a year ago.

Butter imports, at 14.7 million pounds, were down 22.3%, though year to date are up 5.6%. Cheese totaled 31 million pounds, down 20.1%, and down 4.2% YTD.

Mixed Pulse



Tuesday’s Global Dairy Trade Pulse saw 4.8 million pounds of product sold, down from 4.9 million in the last Pulse. The price of skim milk powder was down, while whole milk powder was up from the Sept. 10 Pulse.