Cheese production reached record levels in March, according to the U.S. Department of Agriculture’s latest Dairy Products report. First of all; butter production, at 141.1 million pounds, was unchanged from February, but 6.2 million pounds or 4.3 percent below March 2009. Nonfat dry milk output, at 137.5 million pounds, was up 16.8 percent from February and 0.2 percent above a year ago.
Mozzarella cheese output totaled 300.4 million pounds, up 41.3 million pounds or 16 percent from February, and 20.4 million or 7.3 percent above a year ago.

Total Italian type cheese, at 380.4 million pounds, was up 50 million pounds or 15.1 percent from February, and 21 million or 5.8 percent above a year ago.

Cheddar production totaled 281.6 million pounds, up 37.2 million pounds or 15.2 percent from February, and up 2.3 million pounds or 0.8 percent from a year ago. American cheese amounted to 362.3 million pounds, up 41.9 million pounds or 13.1 percent from February but down 2.1 million or 0.6 percent from a year ago.
Total cheese output came to 890.1 million pounds, up 114.8 million pounds or 14.8 percent from February, and 19.6 million or 2.3 percent above a year ago.

The cash block cheese price closed the first Friday in May at $1.38 per pound, down three-quarters on the week, but 24.25 cents above a year ago. Barrel closed at $1.3725, also down three quarters, but 31.75 cents above a year ago when the barrels bottomed out at $1.0550. Eight cars of block traded hands on the week and 10 of barrel. The lagging NASS-surveyed U.S. average block price lost 1.3 cents, slipping to $1.4257. Barrel averaged $1.3939, down 2.7 cents.

Butter inched 2 cents higher Monday and Tuesday, plunged 6 cents Wednesday, regained 2 on Thursday, and a half-cent Friday, and closed at $1.6050, down a penny and a half, and reversed 12 weeks of gains, but it’s 36.5 cents above a year ago. Eight cars were sold. NASS butter averaged $1.5491, up 3.4 cents.

Cash Grade A nonfat dry milk closed at $1.3275, up 3 cents on the week. Six cars were sold. Extra Grade closed at $1.30, up a nickel. NASS powder averaged $1.2174, up 4 cents. Dry whey averaged 35.74 cents, up 0.5 cent.

Butter prices may increase in summer
Mary Ledman, principal of Keough Ledman, Associates Incorporated in Libertyville, Ill., said in Tuesday’s DairyLine that “Everybody seems to want to be holding butter in anticipation of further price increases in the second half of the year.”
She added that butter stocks and production are down from a year ago and global demand is good and “Until the EU (European Union) does anything with its couple 100,000 metric tons of butter that it has in storage there’s an opportunity for butter prices to continue to rise.”

Ledman believes the bottom is in on cheese and she expects prices to climb as butter and powder pull Class IV milk prices higher. Class II prices are being pulled higher and even the Class I is being driven off of butter-powder values, she said, “So cheese will come along for a ride,” but she warns that Class III markets may lag $1-$1.50 versus the Class IV markets in the near future.
“I hope summertime grilling helps pull demand higher for cheese,” Ledman said, and she believes the block-barrel spread could be more positive to barrel. “It’s the flush in the Upper Midwest, and I think there’s going to be plenty of milk around and plenty of cheese.”

Reacting to China’s agreement to give the U.S. 30 days to work with authorities to secure an agreement on a new health certificate for food-grade dairy exports to China; Ledman said the dispute claims that the U.S. does not have a health certificate in place to meet China’s regulations for food grade dairy products.

Some of the more cynical people believe the amount of time it takes to renegotiate this agreement will reveal whether this is a global monetary policy issue or really a food safety issue, according to Ledman. Some believe this is being dictated by monetary policy rather than food safety, she concluded.

California cheese price improves
Meanwhile, California’s April 4b cheese milk price was announced this week at $12.30 per cwt., up $1.17 from March, $1.89 above April 2009, but is 62 cents below the comparable Federal order Class III price. The 4a butter-powder price is $13.49, up 65 cents from March and $3.70 above a year ago.

The CWT program announced the acceptance of four export assistance bids this week from Dairy Farmers of America to export 2.7 million pounds of Cheddar and Monterey Jack cheese to the Middle East and Asia. CWT cheese exports now total 21.7 million pounds to 15 countries.

The crop planting season is off to a record pace, according to Friday’s DairyLine. Dairy Profit Weekly Editor Dave Natzke, has been, pardon the pun, outstanding in the field, and reported that, as of May 3, nearly 70 percent of the nation’s intended corn acreage and 15 percent of the soybean acreage had been planted, which is well ahead of last year’s pace and historical averages for early May.

About 20 percent of the corn plants have emerged nearly double the 5-year average, he said, and most areas are reporting good soil moisture levels as crops begin to grow. In the Midwest and Northeast, there were even farmers preparing for hay harvest, a job usually associated with Memorial Day.

“All eyes will be on the weather this weekend,” he said. “We reached nearly 80 degrees here in north-central Wisconsin on Tuesday, but frost and up to 2 inches of snow are forecast for Friday evening, which could threaten emerged plants.”

Readers with questions or comments for Lee Mielke may write to them in care of this publication.