The KDM Dairy Report 2/12/2023

Cheese: In the Northeast and West, cheese makers are running busy production schedules as they work through available milk supplies. Spot milk prices as much as $10 under Class III were reported again in the Midwest this week, and cheese production remains active. Some stakeholders in the Northeast expressed concern that milk availability may be impacted by a recent cold front that swept through parts of the region. Domestic demand for cheese is mixed in the West: some contacts report steady sales while others relay a decline in recent weeks. In the Northeast, retail demand for cheese is softening, and food service sales are mixed. Northeast pizza makers say pizza sales are strong ahead of the professional football championship game. Demand has shifted from steady to strong for retail cheddar and some Italian style cheeses in the Northeast. Meanwhile, sales of curds and barrels in the region are steady to slower. Cheese inventories are growing in the Northeast, and stakeholders say loads are available for purchasing in the West. Some western contacts report barrel inventories are greater than block inventories and suggest this may be contributing to the current block-barrel spread on the CME.  (USDA Cheese Highlights)

Butter: In all regions cream supplies are readily available for production. Cream multiples are holding somewhat steady in the Central region, while moving lower at the top end in the West. In the East, increased Class II production may be contributing to the rising regional cream prices. Butter makers throughout the country are operating busy production schedules. Butter inventories are outpacing demand in the West, though steady export demand for unsalted butter is keeping unsalted inventories tighter than salted. Spot butter availability varies throughout the East, as some processors in parts of the region are focusing on freezing butter in bulk. Demand for butter is steady to strong in the East from both retail and food service customers. Contacts in the West report soft retail sales for butter and some say demand is well below previously forecasted levels. Bulk butter overages range from 0 to 10 cents above the market, across all regions.  (USDA Butter Highlights)

Dry whey:  The price range and mostly price series for dry whey on the bottom of the range has moved higher, and the tops moved lower. Demand for dry whey is steady to higher in domestic markets as some stakeholders have relayed an increase in spot inquiries this week. Export demand is unchanged, though some contacts say interest from purchasers in Asian markets remains below previously forecasted levels. Loads of dry whey are available on the spot market. Liquid whey is available for drying as cheesemakers are operating busy production schedules. Contacts report lower prices for higher protein whey concentrates and permeate are causing them to shift more production towards dry whey.  (USDA Dry Whey updates)