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Bird flu outbreak continues to garner dairy industry’s attention
Mielke Market Weekly
By Lee Mielke
 Dairy industry attention remains on the avian influenza outbreak. North Carolina has been added to the named states that have it. Restrictions on dairy cattle movement are in place in Alabama, Arizona, Arkansas, California, Delaware, Florida, Hawaii, Idaho, Kentucky, Louisiana, Maryland, Mississippi, Nebraska, North Carolina, Pennsylvania, Tennessee, Utah and West Virginia.
The American Association of Bovine Practitioners says this infection in cattle is not the same as the highly pathogenic avian influenza (HPAI), and referred to it as Bovine Influenza A Virus (BIAV).
Speaking in the April 15 “Dairy Radio Now” broadcast, HighGround Dairy economist Betty Berning said dairy cows get sick but can and do recover, unlike poultry flocks where the birds are euthanized or die rapidly.
Transmission method is still unclear, according to Berning. “We know it originates in wild waterfowl and that’s how the cows were getting sick but not much is known beyond that.” USDA says it may be transferred by milking equipment, people milking the cows, or both. Dairies are encouraged to limit bird exposure and all traffic into and out of farm properties. There continues to be no concern about the safety of the U.S. milk supply.
The Agriculture Department lowered its milk production forecast in its sixth consecutive World Agriculture Supply and Demand Estimates report. The 2024 forecast was reduced due to slower expected growth in milk per cow. Cow numbers were unchanged from last month’s report.
2024 production and marketings were projected at 226.3 and 225.3 billion pounds respectively, down 1 million pounds on both from last month’s estimate. If realized, both would be down 100,000 pounds or 0.04 percent from 2023.
Fat basis imports for 2024 were raised on higher expected butter and cheese imports. Skim-solids basis imports were raised for several dairy products. Fat basis exports were raised on strong international demand for butter and price competitiveness of U.S. cheese. Skim-solids basis exports were lowered as fewer expected shipments of lactose and whey products more than offset higher shipments of nonfat dry milk (NDM) and cheese.
Butter prices for 2024 were raised on observed prices and continued strength in demand. Cheese, NDM, and whey prices were all lowered on recent prices.
The Class III milk price forecast was lowered due to lower cheese and whey price forecasts, while the Class IV price was raised due to higher butter prices more than offsetting lower NDM prices.
The 2024 Class III price was projected to average $16.20 per hundredweight, down 95 cents from last month’s estimate, and compares to $17.02 in 2023 and $21.96 in 2022.
The Class IV average, at $20.40, is up 30 cents from a month ago, and compares to the 2023 average of $19.12 and $24.47 in 2022.
The week ending March 30 saw 56,700 dairy cows go to slaughter, down 900 from the previous week, and 10,100 or 15.1 percent below a year ago. Year to date, 871,500 head have been culled, down 123,700 or 14.2 percent from a year ago.
February milk production was down 1.3 percent from a year ago, factoring the Leap Day, and the February Dairy Products report shows how that played out.
Cheese production fell to 1.133 billion pounds, down 5.6 percent from January but up 3 percent from February 2023, down 0.6 percent, when factoring the Leap Day. The January total was revised up 10 million pounds. Production for the first two months of 2024 totaled 2.3 billion pounds, up 1.2 percent from 2023.
StoneX says cheese production was 7 million pounds lower than they expected, most of it coming in Cheddar while mozzarella output was closer to forecasts. “Usually this large of a drop in Cheddar production is bullish for the market.”
Wisconsin provided 283.3 million pounds of the total, down 6.5 percent from January but 4.0 percent more than a year ago. California produced 200.9 million pounds, down 4.1 percent from January and 0.5 percent below a year ago. Idaho, with 76.6 million pounds, was down 11.7 percent from January but 5.8 percent above a year ago. New Mexico, at 75.7 million, was down 7.6 percent from January but 2.2 percent more than a year ago.
Italian cheese production was down 6.2 percent from January but 4.4 percent above a year ago, not factoring the Leap Day. American output was down 7.5 percent from January and 1.2 percent below a year ago. Mozzarella was 3.2 percent from a year ago.
Cheddar output plunged to 304.9 million pounds, down 25.7 million pounds or 7.8 percent from the January level, which was revised up 4.5 million pounds, and was down 12.2 million pounds or 3.8 percent, from a year ago. YTD Cheddar is down 5.3 percent.
Butter production dropped to 197.6 million pounds, down 19.6 million pounds or 9.0 percent from January’s total which was revised up 3 million pounds, but was up 10.4 million pounds or 5.6 percent from a year ago. Butter was up 1.9 percent, accounting for the Leap Day. YTD butter is at 414.9 million pounds, up 6.8 percent from a year ago.
Yogurt production totaled 399.1 million pounds, down 0.4 percent from a year ago, with YTD output at 796.7 million pounds, up 0.6 percent.
Dry whey production slipped to 72.1 million pounds, down 5.6 million pounds or 7.2 percent from January, but was up 5.3 million pounds or 7.9 percent from a year ago. YTD whey stands at 149.9 million pounds, up 4.4 percent. Stocks grew to 72.9 million pounds, up 5.4 million or 8.0 percent from January and 3.9 million pounds or 5.7 percent above those a year ago.
Nonfat dry milk output jumped to 147.4 million pounds, up 9.1 million or 6.6 percent from January but was 35.1 million or 19.3 percent below a year ago. YTD powder was at 285.7 million pounds, down 20.1 percent. Stocks fell to 209.6 million pounds, down 2.7 million or 1.3 percent from January, and down a whopping 106.2 million pounds or 33.6 percent from 2023.
Skim milk powder production dropped to 36.2 million pounds, down 20.7 million pounds or 36.3 percent from January, and 1 million or 2.6 percent below a year ago.
StoneX called the nonfat-skim milk powder production bullish. “Total powder production was down nearly 20 percent from last year which contributed to the 33.6 percent decline in inventory volume from 2023 levels. Given the data in this report it seems February milk production may have been a bit overstated,” concluded StoneX. “As there were a lot of solids that would have gone missing for these production numbers to have occurred.”
CME block Cheddar climbed to $1.57 per pound Tuesday, highest since Feb. 29, then lost 6 cents Thursday but rallied Friday and finished at $1.5350, up 2 cents on the week but 24 cents below a year ago.
The barrels marched to $1.5675 Monday, then back tracked some, but also rallied Friday to close at $1.5725, highest since March 6, up 4.25 cents on the week, 6 cents above a year ago, 3.75 cents atop the blocks. CME sales totaled 44 loads of block on the week, 21 on Friday alone, and 20 of barrel.
Milk accessibility is wide open in the Upper Midwest, says Dairy Market News, and Mid-Week spot milk prices were as low as $6-under Class.