Market Reports

Despite significant challenges, milk production continues to grow in the United States. USDA published its monthly Milk Production report on Monday, indicating that national output rose to 17.675 million pounds in February.

The official start of spring is right around the corner and milk volumes are responding accordingly. Output is steady to higher in most parts of the country as the spring flush rolls in.

Rapid expansion, slower pull from bottlers ahead of spring break, and unplanned plant shutdowns have all contributed to the excess in the Central region. Some plants are not running as hard as they might have in the past. But the less aggressive increase does have one upside; according to USDA, “cheese stores are not getting ahead of processors.”

Cull rates are high, and there is a long list of dairies for sale at the major auction houses. But it will take some time – perhaps six months or more – before this pain on the farm translates to less milk. For now, there is milk aplenty.

Rested up after a long weekend, the cheese markets came charging out of the gates but they gave it all back later in the week. Milk remains cheap in the cheese states which should result in higher cheese production. Weather issues, labor shortages, and mechanical problems have slowed cheese production all year, creating a chicken-and-egg conundrum.

Activity at the spot market in Chicago was mixed this week as prices moved modestly up and down, testing new boundaries. Milk remains plentiful in most parts of the country, especially the Midwest, but lower commodity prices appear to be doing the legwork of generating additional customer interest.