The KDM Dairy Report 11/06/2022

Cheese:  In the Northeast and West, available milk is allowing cheesemakers to run steady production schedules. In the Midwest, milk has tightened slightly this week, and Class III producers are active on the spot market. Some Midwest cheesemakers say customers’ needs are changing and so they are shifting production to other cheese varieties. In the Northeast, spot cheese loads are available for purchasing, while Midwest contacts say inventories are balanced. In the West, stakeholders say cheese barrel and block loads have become more available in recent weeks. In the West, food service and export demands for cheese are steady. In the Northeast, food service sales are steady to lower, and contacts report softening retail sales in the Northeast and West. Midwest cheesemakers say sales are strong, but some process and curd producers say orders have recently slowed. Cheese markets have recently been under bearish pressure as prices pushed lower on the CME throughout last week. Some Midwestern contacts see some potential silver linings to recent changes in the market: lower prices may prompt more sales and the block barrel price spread is no longer inverted.  (USDA Cheese Highlights)

Butter:  Cream is available in the Central region, and contacts in the Northeast and West say cream supplies are becoming more available. In the West, demand for cream is steady for Class II and butter production. Contacts in the Northeast say Class II interest in cream is limiting availability for butter makers. Meanwhile, in the Central region, extra cream has contributed to increased churning in recent weeks. Some churning in the West is limited by labor shortages, but butter makers say they are running busy schedules in the region. Butter makers in the Northeast are focusing their production on fulfilling holiday and baking season contractual needs. Retail butter sales are steady to higher in the Northeast, though food service demand is unchanged. Contacts in the Central region say demand is steady to busy as purchasers are making a final push ahead of the holiday season. In the West, some grocers have reportedly purchased the butter they need for the holiday season and are reducing their orders. Spot loads of butter have become more available, in the West, in recent weeks. Bulk butter overages range from 5 to 18 cents above market, across all regions.  (USDA Butter Highlights)

Dry whey:  The price range and mostly price series for dry whey slid lower this week. Demand for dry whey is steady in domestic markets, though some stakeholders say sales are below previously forecasted levels. International demand for dry whey is softening. Contacts report increased COVID restrictions in some Asian countries are limiting the movement of dry whey loads into those markets. Loads of dry whey are available for spot purchasing. Dry whey production is unchanged from last week, but limited, as production is focused on higher whey protein concentrates and permeate. Some drying facilities are running below capacity due to labor shortages and delayed deliveries of production supplies.  (USDA Dry Whey updates)