The KDM Dairy Report 8/5/2022

Cheese: Milk is available for cheesemakers throughout the country, despite declining output. Some cheesemakers in the Northeast and West say they are running active schedules, though labor shortages are causing them to run below capacity. In the Midwest, production schedules are somewhat limited as some plants have downtime due to maintenance. Demand for cheese in retail and food service markets is, reportedly, softening in both the Northeast and West regions. Meanwhile, prices below $2 in the Midwest have contributed to an uptick in demand. Midwest cheese barrel inventories are mostly balanced, but curds are less available as demand is outpacing production. Cheese inventories are available in the Northeast and West. (USDA Cheese Highlights)

Butter: In the Northeast, cream inventories are tight and Class IV multiples are rising. Contacts in the Central region relay that cream is available in the region and they are also able to purchase from sellers in the West. Volumes of cream are available in some parts of the West, though overall supplies are tightening in the region. Some Northeastern butter makers are finding it more profitable to sell cream, while others are actively churning. Maintenance, labor shortages, and high temperatures are affecting some western butter makers’ abilities to run full schedules. Contacts in the West report strong demand for bulk butter, but weakening food service and retail demand. Meanwhile in the Northeast, butter purchasing is in a summertime lull. In the Central region, butter sales are trending higher as some customers are preparing for increased fall demand. By midweek, market prices for butter extended to their highest price, on the CME, since September of 2015. Contacts in the Northeast and West are concerned that current butter inventories are tighter than in previous years. Central region contacts say they expect some firmness in butter markets, at least for the near- to mid-term. (USDA Butter Highlights)

Dry whey: Prices for dry whey moved higher at the top of the range, while sliding lower at the bottom. The mostly price series for dry whey held steady this week. Domestic demand for dry whey demand is unchanged. Contacts report decreasing interest from purchasers in international markets, as exports to Asian markets are below some stakeholders’ expectations. Inventories of dry whey are growing and available for spot purchase. Cheesemakers are running active schedules, leaving plentiful volumes of liquid whey available for drying operations. Despite this, plant managers are focusing their production on higher whey protein concentrates and permeate, limiting dry whey production. Plant managers continue to report labor shortages and delayed deliveries of production supplies as inhibiting their ability to run busier drying schedules. (USDA Dry Whey updates)