April milk production in the top 23 producing states hit 15.5 billion pounds, according to the USDA’s preliminary estimate, up 1.7 percent from April 2010. April output in the 50-state total was 16.7 billion pounds, up 1.5 percent.
Revisions subtracted 6 million pounds from the March estimate which ended up at 15.8 billion, up 2.4 percent from a year ago. The CME’s Daily Dairy Report said the 1.5 percent increase in April was below most expectations.

April cow numbers in the 23 states was 8.43 million head, up 8,000 from March, and 97,000 more than a year ago. Production per cow averaged 1,834 pounds, up 9 pounds from a year ago.

California production was up 2.6 percent from a year ago, thanks to 14,000 more cows in the herd, but output per cow was down 5 pounds. Wisconsin was down 0.1 percent on a 10 pound loss per cow. Cow numbers were up 5,000 head. New York was up 0.8 percent, thanks to a 15 pound gain per cow.
Cow numbers were unchanged. Idaho was up 4.6 percent on 19,000 more cows and a 20-pound gain per cow. Pennsylvania was off 0.8 percent due to a 20 pound gain per cow. Cow numbers were up 2,000. Minnesota was down as well, off 1.9 percent on a 35 pound loss per cow, though cow numbers were up a thousand head.

The biggest gain occurred in Arizona, up 8.2 percent despite a 20 pound loss per cow but that was offset by an additional 16,000 cows. Colorado was next, up 7.8 percent, followed by Texas, up 7.2 percent. Texans saw a nice 60 pound gain per cow and milked 16,000 more cows than a year ago. The biggest decline was in Ohio, down 5 percent, thanks to a 60 pound drop per cow and 4,000 fewer of them. Missouri was next, down 4.5 percent, followed by Illinois, down 2.4 percent.

Jerry Dryer, editor of the Dairy & Food Market Analyst, a weekly e-newsletter, said the report was bullish. “Output per cow is slipping and was below year-ago levels in several states during April,” he said. “High feed prices and feed quality seem to be the culprits.”

Cow slaughter down

USDA estimated 237,800 culled dairy cows were slaughtered under federal inspection in April 2011, down about 30,300 head from March 2011, but 3,000 more than April 2010. Compared to a month earlier, cow slaughter was down in all reporting regions, with biggest declines in the West and Midwest. January-April 2011 dairy cow slaughter was estimated at 1.019 million head, up 72,400 from the same period in 2010.

Cheese traders the third week of May were looking for some direction following the previous week’s decline, the first in two weeks, mostly attributed to revisions in Chicago Mercantile Exchange (CME) butter stocks which we reported on last week. Traders got that direction this week and it was UP.
The CME is discontinuing that weekly report on butter storage and a similar report on nonfat dry milk. FC Stone dairy economist Bill Brooks said the report provided data for traders of deliverable futures, but “the market has shifted to cash-settled butter contracts.” “The basis for data in the reports changed as different warehouses and warehouse users participated,” he said.
“Even though the butter report didn’t have a consistent relationship to USDA stocks data, the report did give a sense of the direction in stocks,” Brooks said, but he also told me that the CME had floated the idea of ending these reports two to three months ago so last week’s occurrence was perhaps the “straw that broke the camel’s back.”

Cash block cheese up

CME cash block cheese closed Friday at $1.7075 per pound, up 8.5 cents on the week, and 20.75 cents above a year ago. Barrel closed at $1.71, up 6.75 cents on the week, and 23.25 cents above a year ago.

Sixteen cars of block traded hands in the cash market on the week and nine of barrel. The NASS-surveyed U.S. average price on block cheese hit $1.6262, up 0.8 cent, while the barrels averaged $1.6493, up 3.1 cents.

The cheese market was “unsettled to weak,” according to USDA’s Dairy Market News, and “short term price resistance seems to have developed as buyers expect cheese offerings to build as milk intakes and cheese production heads toward the spring peak.” Current interest is moderate and process orders are steady to improved. Processors and packagers are shipping orders to retailers and summer vacation locations for Memorial Day weekend use, the report said.
Cash butter stole the show this week after plunging 14.5 cents the previous week. The rebound started on that Friday and shot up from there to close the following Friday at $2.07, up 12 cents on the week, and 49 cents above a year ago. 16 cars found new homes. NASS butter averaged $2.0791, up 5.7 cents.
Churning schedules are increasing across the country, according to USDA. Producers expected some inventory building, especially when the price fell below $2 in anticipation of prices returning to the $2 level later this summer and fall but here we are back at $2 already. Butter demand is mixed, USDA said, though the lower prices increased interest from ice cream manufacturers.
It remained to be seen whether the additional butter reported in last week’s revision would show up in the April Cold Storage report which was released after trading was completed on Friday. It was not expected to mean much because the butter inventory level would still be below that of a year ago.

The views and opinions expressed in this column are those of the author and not necessarily those of Farm World. Readers with questions or comments for Lee Mielke may write to him in care of this publication.