U.S. dairy farmers eked out small increases in milk production in August and September, according to USDA’s latest data, after seeing output lag year-ago levels in 12 of the previous 13 months.

September output was reported at 18.2 billion pounds, up 0.1% from September 2023. The 24-State total, at 17.5 billion pounds, was up 0.2%.

August output in the 50 states was revised up 89 million pounds from last month’s report, resulting in production being up 0.4%, instead of the 0.1% decrease originally reported. The 24-state total was raised 85 million pounds, resulting in a 0.5% gain from a year ago, instead of the 0.1% increase reported.

September milk cows totaled 9.328 million head, unchanged from the August count, which was revised up 3,000 head, but was 38,000 or 0.4% below September 2023. The 24-State count, at 8.887 million, was also unchanged from August, which was revised up 9,000 head, but was 20,000 or 0.2% below a year ago.

September output per cow in the 50 states averaged 1,950 pounds, up 9 pounds or 0.5% from a year ago.

HighGround Dairy points out that “the most substantial growth came from Texas and Kansas, where cheese capacity is being added, plus Idaho and South Dakota. Idaho’s totals have been up for three consecutive months, recovering from the year on year decreases earlier in 2024 due to avian influenza.”

California, where influenza has spread rapidly in the Central Valley, saw milk production rise 1 million pounds, virtually unchanged from a year ago. Cow numbers were down 4,000 head but output per cow was up 5 pounds.

Next month’s report will likely show some revision to this data as well as a marked decrease in October output due to the bird flu.

Wisconsin milk was down 14 million pounds or 0.5% from a year ago, on 4,000 fewer cows and 5 pounds less per cow.

Colorado output was up 1.4%, on a 10-pound gain per cow, while cow numbers were down 2,000 head.

Idaho was up 1.8% on 7,000 more cows and a 15-pound gain per cow. Both states had battled the bird flu, as did Texas which was up 4.9%, thanks to 20,000 more cows and a 35-pound gain per cow.

Kansas output was up 3.0%, thanks to 6,000 more cows outweighing a 10-pound drop per cow. Michigan was down 0.9%, Minnesota was down 2.0%, New York was up 1.2%, and Pennsylvania was up 0.1%.

New Mexico again showed the biggest loss, down 9.1%, on a drop of 26,000 cows, although output per cow was up 15 pounds. South Dakota posted the biggest increase, up 7.9%, thanks to 16,000 more cows. Output per cow was down 5 pounds.

Oregon was down 1.9% on 2,000 fewer cows. Output per cow was unchanged.

Washington state was off 0.2% on a 20-pound loss per cow. Cow numbers were up 2,000 head.

Good dairy demand

Dairy demand looked strong in August, based on USDA’s latest Supply and Demand Utilization data. Total cheese disappearance was up 1.2%, up 1.3% domestically while exports were up 14.8%. HighGround Dairy points out that “CME spot Cheddar prices continued to climb throughout August as months of limited production finally collided with rising domestic demand.”

Butter was up 9.3%, most of it in domestic utilization which totaled 196.4 million pounds, up 9.1%. Exports were up 17.3% but only amounted to 6.1 million. HGD says, “For the second month in a row, stateside usage grew year-over-year, and exports logged their third month of increase.”

Nonfat dry milk and skim milk powder utilization was still dragging, the seventh time in eight months, totaling just 176 million pounds, down 7.2% from a year ago. Domestic use was down 31.3% while exports were down 1.1%.

Dry whey usage was down 15.5%. Domestic disappearance was down 33.5% while exports were up 14.1%. HGD says, “USDA revised July’s total whey use down 15.1% year over year. Disappearance sank 15.5% and ended up being the lowest monthly volume since April 2023.

“Plant outages in August limited production thus supporting CME prices near 60 cents per pound.”

Fluid sales up 1.6%

Fluid milk sales may have turned the corner after decades of decline. Sales have topped those of a year ago in six out of the first eight months of 2024. USDA’s latest data shows August packaged sales totaled 3.6 billion pounds, up 1.6% from August 2023. Conventional product sales totaled 3.4 billion pounds, up 1.3% from a year ago.

Organic products, at 261 million pounds, were up 5.5%, and represented 7.2% of total sales for the month.

Packaged fluid sales in the eight-month period totaled 28.3 billion pounds, up 1.2% from 2023. Conventional product sales totaled 26.3 billion pounds, up 0.8% from a year ago.

Organic products, at 2.0 billion pounds, were up 6.6%.

Cheese slipping again

After four consecutive weeks of decline, CME block Cheddar closed Mid-October at $1.9250 per pound, up 3.75 cents on the week and 13.75 cents above a year ago.

The barrels finished at $2.01, 12.25 cents higher, 30 cents above a year ago, and 8.50 cents above the blocks; 16 loads of block were traded last week and 8 of barrel.

The blocks were down a half-cent Monday on 3 trades and lost 3 cents Tuesday, falling to $1.89, on a trade.

The barrels were down 3 cents Monday on 4 sales, and dropped 7 cents Tuesday on a trade, dipping to $1.91.

Dairy Market News reports cheese demand remains about the same, according to Midwest cheesemakers. Some say orders are strong, particularly for retail. Others say demand is slow seasonally. Some plants ran busy schedules while others scheduled downtime last week. Some say Class I needs have continued to keep overall milk availability somewhat snug.

Milk demand is stronger from western cheese manufacturers. However, weaker milk output is leaving less available in some parts. Cheese output is steady to stronger.

Domestic demand is steady for most varieties and demand from international buyers is stronger, according to DMN.

Lots of butter found its way to Chicago and set a record for the week, while seeing its first price gain in six sessions last Wednesday. It closed Friday at $2.66 per pound, 3.50 cents higher on the week, ending five weeks of losses, but was 70 cents below a year ago. A record 161 loads traded hands last week.

The butter jumped 7 cents Monday on 3 sales, hitting $2.73, highest since Oct. 1, but then gave back 5.25 cents Tuesday on 3 trades, slipping to $2.6775.

Butter production in the Central region remains busy but in line with cream availability, which was notable last week. Processors say retail demand is busy, meeting seasonal expectations, while food service is not as bullish. Stocks are stable to long, says DMN.

Retail and bulk butter production in the West is steady to strong. Some plants were running heavier due to upcoming equipment projects. Milk production is weaker in parts of the region but cream is plentiful.

Domestic butter demand is steady to lighter while international interest is stronger. Domestic prices have been more competitive with international prices thus far in October, according to DMN.

Grade A nonfat dry milk closed Friday at $1.38 per pound, up 2.75 cents on the week and 14.75 cents above a year ago, on 24 sales for the week.

The powder gained 0.75 cents Monday on 3 sales but backtracked 2.75 cents Tuesday on 16 trades, dipping to $1.36.

Dry whey saw its Friday closing at 60.25 cents per pound, up 0.75 cents on the week and 20.75 cents above a year ago, with 21 sales put on the CME board.

Monday’s and Tuesday’s whey was unchanged.

Stronger Pulse

Tuesday’s Global Dairy Trade Pulse saw 4.7 million pounds of product sold, down from 4.9 million in the last Pulse. The prices of both skim and whole milk powder were slightly higher.