By LEE MIELKE
Mielke Market Weekly 

U.S. milk production continues to top year-ago levels but may be slowing. Preliminary data in this week’s March Milk Production report shows output in the top 23 producing states at 16.9 billion pounds, up 1.1 percent from March 2014. The 50-state total, at 18.1 billion pounds, was up 1.2 percent from a year ago.

March cow numbers in the 23 states, at 8.62 million head, were down 4,000 head from February but 86,000 more than a year ago. The 50-state count, at 9.3 million head, is down 5,000 from February but 78,000 more than a year ago.

HighGround Dairy’s Eric Meyer says, "While the U.S. as a whole is still pumping out more milk, and a lot more in some states, overall growth has diminished and the milking herd is worth watching as it decreased versus the prior month for the first time since November 2013.

March output per cow in the 23 states averaged 1,959 pounds, up just 2 pounds from March 2014, and the highest production per cow for the month of March since the 23-state series began in 2003.

The January to March quarter saw milk output total 51.9 billion pounds, up 1.7 percent from a year ago. Cow numbers, at 9.3 million head, were up 17,000 from the October to December 2014 quarter and 88,000 more than a year ago.

Troubles remain in California, where March milk output was down 2.9 percent, following a 3.5 percent decline last month. The Golden State saw a 60-pound drop per cow in March and 2,000 fewer cows milked. Wisconsin, on the other hand, was up 3.6 percent, thanks to a 60-pound gain per cow and 5,000 more cows. The Badger State was up 3.4 percent last month.

Idaho was up 1.3 percent despite a drop in output per cow of 10 pounds, but an extra 10,000 cows made up the difference. New York was up 1.1 percent on a 15-pound per cow gain and 2,000 more cows. Pennsylvania was up 1.3 percent on 1,000 fewer cows but output per cow was up 5 pounds. Minnesota was up 4.4 percent, thanks to a nice 70-pound gain per cow and 1,000 more cows.

South Dakota recorded the biggest gain, up 9.6 percent, followed by Michigan, up 7 percent, thanks to a 25-pound gain per cow and 22,000 more cows. Next was Colorado, up 6.1 percent. The biggest loss was in New Mexico, down 3.9 percent, due to an 85-pound drop per cow, and then California. Texas was down 0.6 percent on a 45-pound drop per cow. Cow numbers were up 8,000 head. Washington State was up 1.1 percent despite a 30-pound drop per cow, but cow numbers were up 7,000 head.

Meanwhile, dairy cow culling picked up in March, according to USDA’s Livestock Slaughter report, which showed an estimated 260,700 dairy cows were slaughtered under Federal inspection in the month, up18,400 head from February and 15,000 head more, or 6.1 percent more than March 2014. The First Quarter saw 778,400 dairy cows make their way to hamburger heaven, up 25,900 head from the same period a year ago.

The heaviest culling again occurred in the West, which included Arizona, California, Idaho, Oregon and Washington, followed by the Midwest states of Illinois, Indiana, Michigan, Minnesota, Ohio and Wisconsin.

Preliminary data in the March Cold Storage report issued April 22 show butter stocks at 184.3 million pounds, up 6.9 million pounds or 4 percent from February but 7.5 million pounds or 4 percent below March 2014.

American type cheese, at 629.5 million pounds, was down 12.8 million pounds or 2 percent from February and 9.6 million pounds or 2 percent below a year ago. The total cheese inventory on March 31 stood at 1.06 billion pounds, virtually unchanged from February but 44.4 million pounds or 4 percent above a year ago.

Dairy traders had to weigh last week’s Milk Production and Cold Storage reports in view of current demand. The cash Cheddar blocks ended the week at $1.61 per pound, highest level since Dec. 22, 2014, up 3.5 cents on the week, ending two weeks of small declines, but still 60 cents below a year ago when they dropped 7 cents to $2.21. The barrels closed Friday, April 24, at $1.62, down a half-cent on the week after reaching the highest level they’ve seen since Dec. 1, 2014, ending four weeks of gain. They are 56 cents below a year ago and a penny above the blocks, a spread that normally averages 3-5 cents below the blocks. Seven cars of block traded hands last week at the CME and only one of barrel. The lagging NDPSR-surveyed U.S. average block price hit $1.5798, up 0.4 cent. The barrels averaged $1.6396, up 2.7 cents.

Barrel cheese has been "surprisingly tight in the Midwest," reports Dairy Market News (DMN), and has led to some manufacturers scheduling additional barrel production to take advantage of the inverted prices. Some Midwest cheese plants are receiving sufficiently increased milk volumes to reduce the need for surplus milk purchases for maintaining desired production levels. Spot milk is available at $2.00 under class, says DMN, and milk components are seasonally good, providing solid yields.

Milk production is increasing in the West and generating volumes such that any plant seeking milk can find it. This is keeping cheese plants mostly at capacity. With barrels tighter, some plants able to switch took advantage of inverted prices.

Cash butter had a good week, finishing April 24 at $1.83 per pound, up 2.25 cents on the week and the highest level since Feb. 5, 2015 but still 8 cents below a year ago. Nothing sold all week. NDPSR butter averaged $1.7351, down 0.7 cent.