April butter and cheese inventories were below those a year ago. The latest Cold Storage report showed April 30 butter stocks at 337.4 million pounds, up 14.2 million pounds or 4.4% from March, but 24.7 million or 6.8% below those in April 2024. March stocks were revised down 578,000 pounds from last month’s report.
StoneX says this was the smallest seasonal butter build in 10 years, adding “There was plenty of milk/cream available in April so we have to attribute this to demand; increased exports and maybe slower imports. With inventory this low the second quarter stocks/use ratio is looking tighter than last year which would justify a $2.60 per pound average price.” It shot higher this week.
American type cheese stocks climbed to 805.9 million pounds, up 10.3 million pounds or 1.3% from March level, but were down 19.6 million pounds or 2.4% from a year ago. The March total was revised 2.1 million pounds lower.
The “other” cheese category holdings inched up to 579.1 million pounds, up 753 million or 0.1% from the March level, but were down 16.8 million pounds or 2.8% from a year ago. The March level was revised up 3.4 million pounds.
April’s cheese inventory totaled 1.4 billion pounds, up 10.4 million pounds or 0.7% from March, but down 35.4 million or 2.4% from a year ago. The March total was revised up 5.9 million pounds.
The Daily Dairy Report stated “Cheese stocks have now trailed prior-year levels for 14 consecutive months, but April’s year-over-year decline was the narrowest loss seen in a year.”
The DDR’s Sarina Sharp wrote in the May 23 Milk Producers Council newsletter; “Plentiful milk and high components add up to a lot of cream. Churns are running hard. But US butter is among the cheapest in the world and exports are booming. Domestic consumption is also record high. It was up 3.6% year over year in the first quarter. Insatiable demand for butter helped keep stocks in check.” The March to April build was the smallest since 2014, according to the DDR, which added; “Butter stocks have topped year-ago volumes in every month since January 2024, but in April they fell 6.8% below prior-year levels.”
Rabobank dairy analyst Lucas Fuess, speaking in the June 2 Dairy Radio Now broadcast, credited the Cold Storage report for the strength in dairy prices in the Memorial Day Week but warned that tariff and trade policy pose “some cloudiness.”
He said limited escalation with Mexico has meant product continues to flow freely and we saw a reprieve in the relationship with China. But, the tariff freeze with China is only for 90 days, he said, and we could see further escalation there so volatility is to be expected.
Worst case scenario would be any escalation of trade differences with Mexico, according to Fuess. “It is in the best interest for both countries to make sure that does not happen,” he said, “Due to the food that flows both ways across that US Mexican border.” He adds that there would be a lot of downside for our whey protein, permeate, and lactose exports in any escalation with China.
Fuess does not see much more rise in cheese prices ahead, due to the anticipated higher supply in the coming weeks but concluded; “Thankfully cheese exports have remained strong at least through first quarter.”
CME Cheddar block cheese climbed to $1.95 per pound Wednesday, highest since Oct. 3, 2024. It was trading Thursday morning at $1.9475, after closing Friday at $1.87.
The barrels saw their Thursday close at $1.87, following a Friday finish at $1.8525.
Retail cheese demand is strengthening in the Central region, according to Dairy Market News, and food service sales are steady. Exports are also strengthening. Class III milk is available and cheesemakers say they are purchasing additional loads as low as $7-under class and are running busy schedules. Spot milk availability is mixed in the west with decreasing farm level output in some parts and more educational institutions starting spring recesses.
Cheese manufacturers convey that milk is sufficiently meeting needs. Cheese production was steady or stronger following the holiday weekend. Inventories are extremely tight. Domestic demand is reported as steady, stronger, or in balance with supplies. International buying varies from steady to strong, says DMN.
Butter soared 10 cents on Tuesday, hitting $2.52 per pound. It added a half-cent Wednesday, inching up to $2.5250, highest CME price since Jan. 27, 2025. It gave back 7 cents Thursday, falling to $2.4550, after closing Friday at $2.42 per pound.
StoneX, in its May 27 Early Morning Update, attributed butter’s strength to end-users seeking more price coverage thru year end and into 2026 amid global fat prices that have yet to show material weakness.” “With inventory this low the second quarter stocks/use ratio is looking tighter than last year which would justify a $2.60 average price,” according to StoneX.
DMN says milk output is steady in the Central region and contacts report cooler temperatures in parts of the region are leaving plenty of cream available. Ice cream makers are pulling on supplies as they prepare for the summer.
Cream multiples are holding steady in the Central region. Butter makers are actively churning, and spot loads of butter are available.
Cream continues to be more than ample in the West despite milk production decreasing week-to-week for parts of the region and ice cream production increasing. Cream multiples remained above flat market mid-week. Churning schedules were steady or stronger following the holiday weekend. Domestic butter demand is steady. Retail demand is described as at or above expectations. Food service demand was termed as down from expectations while export demand is strong, according to DMN.
Grade A nonfat dry milk also had a good week, climbing to $1.2850 per pound Wednesday, highest since Feb. 13, 2025. It held there Thursday, after finishing Friday at $1.2525.
The DDR’s Sarina Sharp says “The anemic dollar is helping US milk powder compete abroad. That’s boosting export prospects and finally starting to prop up US prices.”
Dry whey hit 57.50 cents per pound Thursday, highest since Feb. 10, 2025. It closed Friday at 54.25 cents per pound.
Sharp says “The US accounted for a typical share of China’s whey imports in April, as shipments that arrived last month were not subject to the temporary but significant 145% tariff. Chinese importers stocked up on product and China’s whey imports outpaced April 2024 by 13.9%. There will likely be fewer ships arriving at Chinese ports this month,” Sharp warned. “But US exporters are now rushing to book sales and ship them during the 90-day pause.”
Tuesday’s Global Dairy Trade Pulse saw 4.6 million pounds of product sold, up from 4.4 million on May 13, and the largest Pulse volume since Dec. 31, 2024. It was the GDT’s 80th Pulse event. The first was held Aug. 9, 2022. The prices on both skim milk and whole milk powder were down from the May 13 Pulse.
Meanwhile; The National Milk Producers Federation (NMPF) reported that US and Mexican dairy sectors renewed a partnership and unveiled a work plan this week to “enhance industry collaboration” at their seventh annual summit held recently in Madison, Wis. “Industry representatives reaffirmed their shared commitment to strengthening bilateral collaboration and supporting the long-term success of the North American dairy industry,” says NMPF.
Agriculture Secretary Rollins also announced this week that American dairy producers will have greater market access to Costa Rica, which has approved the first US dairy facility to be registered under their new streamlined approval process.
The announcement drew praise the International Dairy Foods Association which stated; “Costa Rica is a market growing in importance for US dairy. After being a net importer of dairy products a decade ago, the United States now exports more than $8 billion worth of dairy products to 145 countries. US dairy exports topped $8.2 billion in 2024, with Central American markets surging, including Costa Rica, Guatemala and El Salvador all importing record values of US dairy.
In fact, US dairy exports to Costa Rica doubled in value between 2021 and 2024, growing from $31 million to $60 million.”
