Dairy farm milk tanks are not being refilled very quickly. The USDA’s latest preliminary data shows February output at 17.68 billion pounds, down 1.6 billion pounds from January, but 135 million or 0.8 percent more than February 2022, and less than the 1.3 percent increase seen in January.

The 24-state total, at 16.9 billion pounds, was up 1.0 percent from a year ago. Both January totals were revised up 5 million pounds. February was the eighth month in a row that milk production topped that of a year ago.

Farms are adding cows. Cow numbers totaled 9.42 million, up 12,000 head from the January count which had no revision, and was up 37,000 head from a year ago, largest dairy herd since August 2021. The 24-state count was up 12,000 from January and 54,000 above a year ago, the largest since July 2021.

Output per cow averaged 1,877 pounds, up 7 pounds or 0.4 percent from 2022.

The March 20 Daily Dairy Report warned: “Greater milk output in nearly every Midwestern state overwhelmed the region and resulted in steeply discounted spot milk prices and smaller checks for dairy producers. Cooperatives in Texas frequently dumped milk, despite self-imposed caps on members’ output.”

Flooding occurred throughout California, covering fields and roadways, reports HighGround Dairy “closing primary and alternative routes throughout the state, delaying transportation and causing plant downtime. The state remained under siege this week and Gov. (Gavin) Newsom designated 40 counties as disaster counties, including Tulare, Fresno, Kings, Madero, Mariposa and Merced.”

Neanwhile, a Nor’easter dropped three feet of snow on parts of New England last week which caused delayed milk pickups, according to DMN. However, milk production was steady in other parts of the Eastern seaboard.

The Federal Reserve raised interest rates for the ninth time in a row this week by a quarter percent to just under 5 percent in its ongoing effort to control inflation. The action comes in the face of the collapse of two regional banks.

Lots of eyes are on dairy culling as finances tighten on the farm. The USDA’s latest Livestock Slaughter report shows an estimated 266,500 head were sent to slaughter under federal inspection in February, down 31,400 head from January, and mirrored numbers in February 2022. Culling in the two-month period totaled 564,400, up 37,000 or 7.0 percent from the same period a year ago.

The week ending March 11 saw 67,300 head go to slaughter, up 421 head from the previous week and 2,300 more than a year ago. Year to date, 673,400 cows have been culled, up 24,000 head or 3.7 percent, from the same period in 2022.

We have plenty of butter. The USDA’s latest Cold Storage report shows the Feb. 28 inventory at 295 million pounds, up 30.7 million pounds or 11.6 percent from the January figure, which was revised 1.6 million pounds higher, and was 32 million or 12.2 percent more than February 2022. It was the third month in a row that butter stocks topped those of a year ago, but the report is viewed as neutral to the market.

American cheese stocks fell to 816.9 million pounds, down 6.5 million pounds or 0.8 percent from the January inventory which was revised up 4.6 million pounds. Stocks were down 14.2 million pounds or 1.7 percent from a year ago.

The “other” cheese category crept up to 605.5 million pounds, up 5.7 million pounds or 0.9 percent from January, and 5.1 million or 0.8 percent above a year ago.

The total cheese inventory came in at 1.446 billion pounds, down 234,000 pounds or 0.02 percent from January, and 20.7 million or 1.4 percent below a year ago.

Woes continue in international dairy trade. The March 21 Global Dairy Trade’s weighted average dropped 2.6 percent, following the 0.7 percent slip on March 7, and 1.5 percent on Feb. 21. Traders brought 59.1 million pounds of product to market, up from 59 million March 7, and the average metric ton price slipped to $3,361 US, down from $3,403.00 on March 7.

Cheddar led the declines, down 10.2 percent, after dropping 10.2 percent on March 7. Anhydrous milkfat was down 3.8 percent, following a 1.8 percent decline, and butter was down 3.0 percent, after a 0.3 percent slip. Skim milk powder was down 3.5 percent, following a 1.1 percent descent, and whole milk powder was down 1.5 percent, after inching up 0.2 percent.

StoneX Dairy Group says the GDT 80 percent butterfat butter price equates to $2.1012 per pound U.S., down 6.7 cents, and compares to CME butter which closed Friday at $2. GDT Cheddar, at $1.8381, was down 20.7 cents, after losing 26.2 cents in the previous event, and compares to Friday’s CME block Cheddar at a very pricy $2.10. GDT skim milk powder averaged $1.2012 per pound, down from $1.2424, and whole milk powder averaged $1.4641 per pound, down from $1.4865. CME Grade A nonfat dry milk closed Friday at $1. per pound.

China’s dairy imports indeed looked a little more favorable, according to the latest data. HighGround Dairy points out that China did not release January data during the usual time in February but waited to release January and February data at the same time in March, an occurrence that began during the pandemic.

February imports of skim milk powder totaled 108.2 million pounds, down 31.1 percent from February 2022, however skim milk powder imports totaled 89.2 million pounds, up 42.9 percent.

Market share of SMP is steadily changing, says HGD, with New Zealand’s share falling in January to 53 percent, from 64 percent the year prior. U.S. SMP market share increased the most, shifting from 5.5 percent in January 2022 to 11.5 percent this year.

Whey imports totaled 113.7 million pounds, up 52.6 percent from a year ago and have grown in annual comparisons, says HGD, but are still lagging the market highs in 2021. The U.S. is China’s No. 1 whey supplier, taking a 42 percent market share.

Butter totaled 13.8 million pounds, down 15.1 percent, while anhydrous milkfat, at 4.6 million, was down 41 percent.

Cheese imports amounted to 27.6 million pounds, up 0.1 percent, while infant formula, at 53.6 million pounds, was up 37.4 percent from a year ago.

Lucas Fuess, Rabo Bank Senior Dairy Analyst, shared some insights from Robo’s Global Dairy Quarterly report in the March 27 “Dairy Radio Now” broadcast. He warned of an abundant spring flush in the U.S. with steep discounts on milk, but said he doesn’t see a lot more near term weakness, “as demand holds up.”

Europe is seeing more milk, he said, and the weak March 21 GDT came even as Chinese demand was “fairly decent. Other buyers did not step up enough to lift those global product prices.”

He expects some price recovery in the second half of 2023 for the U.S. though he admits it will be a challenge to keep pace with 2022 export records in 2023.

Back home, fluid milk sales looked a little better in January, in that they didn’t fall as much as has been the case. The USDA’s latest data shows packaged fluid product sales totaled 3.8 billion pounds, down just 0.6 percent from January 2022.