You’ll recall March milk production was only up 0.5 percent from 2022. The March Dairy Products report shows most of the extra milk went to the dryer and churn.

Cheese production totaled 1.229 billion pounds, up 11.7 percent from February output which was revised down 9 million pounds, but was down 0.2 percent from March 2022, the first year over year drop in 2023. Output for the three months stands at 3.5 billion pounds, up 1.0 percent from the same period a year ago.

Italian cheese totaled 511.7 million pounds, up 11.5 percent from February but 1.5 percent below a year ago. American output climbed to 498.5 million, up 12.5 percent from the February level, which was revised 9.9 million pounds lower, and was up 3.2 percent from a year ago. Mozzarella, at 402.5 million pounds, was down 1.4 percent from 2022.

Cheddar production, the cheese traded daily at the CME, saw output jump to 345.6 million pounds, up 28.5 million or 9.0 percent from the February count, which was revised down 8.3 million pounds, and was up 12.1 million pounds, or 3.6 percent, from March 2022. YTD Cheddar stood at 1.0 billion pounds, up 3.3 percent from 2022.

Butter output climbed to 205 million pounds, up 17.8 million pounds or 9.5 percent from February, and up 2.8 million pounds or 1.4 percent from a year ago. YTD butter output was at 593.5 million pounds, up 2.0 percent from a year ago.

Yogurt production totaled 444.9 million pounds, up 3.6 percent from a year ago and hard ice cream output hit 66.4 million pounds, 0.2 percent above a year ago.

Dry whey production totaled 78.0 million pounds, up 11.2 million pounds or 16.7 percent from February and 200,000 pounds or 0.3 percent above year ago. YTD whey stands at 221.5 million pounds, up 1.2 percent. Stocks grew to 78 million pounds, up 11.1 million or 16.7 percent from February and 0.3 percent above a year ago.

Nonfat dry milk output climbed to 200.2 million pounds, up 17.7 million pounds or 9.7 percent from February and 8.4 million or 4.4 percent above a year ago. Stocks jumped to 319.1 million pounds, up 3.3 million pounds, or 1.0 percent from February, and up a whopping 31.2 million pounds or 10.8 percent from a year ago.

Skim milk powder production totaled 36.0 million pounds, down 1.2 million or 3.3 percent from February, and 6.9 million pounds or 16.1 percent below a year ago.

The U.S. makes a lot of cheese and it’s a good thing because American’s love it. The May 8 Daily Dairy Report says, “Cheese consumption has been booming for decades. While Cheddar, Italian styles, and charcuterie-board-worthy artisan cheeses get most of the attention, their poorer cousins, processed and powdered cheeses, are also popular. Mozzarella and Cheddar are the favored cheeses, with 2021 per capita consumption at 12.28 pounds and 11.41 pounds, respectively, but processed cheese consumption is not far behind at 8.24 pounds.”

Pizza is likely the biggest favorite food that includes cheese, however the DDR says macaroni and cheese is right up there. I hate to think where milk prices would be if we didn’t have a love affair with cheese.

StoneX says in its May 10 ‘Early Morning Update:’ “Even with inflation persisting, consumers remain willing to spend on food service. The U.S Food Service Index has actually risen from the end of 2022 while on the contrary the Retail Food Sales Index has dipped slightly. The Food Service index is well above last year’s levels and 2021 levels while the Retail Food remains below the last two years.”

Broker Dave Kurzawski, in the May 15 ‘Dairy Radio Now’ broadcast, said retail sales normally increase in times of recession as people eat at home, but to see food service so strong, “We don’t know if it’s because the economy is so strong or is this a hangover from COVID?” “They’re spending money on food and they’re spending a premium to feed themselves,” he said. “If you look at the unemployment rate etc. the economy is still chugging along despite inflation.”

Kurzawski admits this good economic news is not showing up in farm milk prices yet, “but it’s coming.” May Class III is hovering around a low to mid-$16 range and that will ding a lot of dairy farmers, he said, but this is the time of year that price lows are made, as we have plenty of milk. “This is a much more normal year for the first time this decade,” he concluded. “The price strength and better demand should be on tap (for farmers) the second half of the year.”

We export a lot of our cheese and those exports in March totaled 91.6 million pounds, down 0.4 percent from March 2022. Mexican demand soaked up a hefty 34 percent share, according to HighGround Dairy, and U.S. export volume to that market grew 16 percent. Cheese sailing to Australia jumped 39 percent, while exports to Asia fell, down 61 percent to South Korea and down 23 percent to Japan.

March U.S. dairy exports showed a lot of negatives, however. From a volume standpoint, total exports fell from March 2022, but, historically speaking, HGD says they were in the top three, just behind 2022, according to U.S. Census data.

Mexican demand remained robust, says HGD, up 25 percent. During first quarter, the U.S. exported 408 million pounds of dairy products to its southern neighbor, an increase of 33 percent, and through first quarter, Mexico held a nearly 28 percent share of U.S. exports, compared to first quarter 2022, when that figure was slightly above 21 percent.

Exports to South Korea were down 54 percent, warned HGD, and dropped 33 percent compared to the first quarter of 2022. Exports to China rose annually in March and on the quarter, driven by whey, fluid milk, cheese and butter shipments.

Nonfat dry milk exports totaled 172 million pounds, down 2.7 percent, though year to date were up 3.0 percent. Shipments to Mexico soared by 45 percent, totaling almost 93.6 million pounds, a 54 percent market share, says HGD.

Butter exports totaled 8.6 million pounds, down 36 percent. In fact, the U.S. was a net butter importer by 5.8 million pounds, as high year end prices took a toll. Butter exports to key markets like Canada, Mexico and South Korea were down. Kiwi butter made up 93 percent of the imports to the U.S., according to HGD.

Dry whey exports totaled 46.9 million pounds, up 8.3 percent from a year ago, with YTD exports up 8.8 percent.

The Daily Dairy Report credits a strong Mexican peso for “making American dairy products look like a bargain, which suggests shipments will remain robust.”

Exports continue via the Cooperatives Working Together program. Member cooperatives accepted two offers of assistance this week on sales of 51,000 pounds of American-type cheese and 44,000 pounds of whole milk powder. The product will go to customers in South America and Asia through August.

Tuesday’s Global Dairy Trade Pulse auction saw 2.2 million pounds of Fonterra whole milk powder sold, up fractionally from the April 25 Pulse, and at $3,175 per metric ton, up $70 from the last Pulse.