The KDM Dairy Report 6/10/2023

Cheese: Milk is plentiful for cheesemaking throughout the country, and contacts in the Midwest report volumes being traded from $11 to $4 under Class. Cheesemakers are operating busy production schedules in the Midwest and West. In the Northeast, contacts note strong production of American-type cheese. Retail demand for cheese is steady in the Northeast, as inflationary pressure is contributing to lighter food service sales. Domestic demand is unchanged in the West, though stakeholders say export demand varies from moderate to softer. Midwestern cheesemakers report demand is trending higher, as some say they are seeing at least slight improvements from prior weeks. Cheesemakers say most of their near-term cheese inventories are spoken for. Inventories of Swiss and Italian-type cheese are steady in the Northeast. Contacts in the West report block cheese inventories are slightly looser this week.  (USDA Cheese Highlights)

Butter: Cream is readily available in the Central and West regions. Contacts in the East note cream has tightened some this week, as hot weather and increased demand from ice cream makers are reducing availability. Despite this, butter makers in the region are running active schedules with some continuing to churn seven days a week. In the Central region, some butter makers have downtime scheduled this week, though overall production is active. Butter production schedules have picked up some in the West, following the recent holiday weekend. Demand for butter is strong in western food service and retail markets, while contacts note softer demand from bulk buyers. In the East, food service sales of butter are somewhat quiet, while retail demand is steady. Contacts in the Central region report butter sales are meeting seasonal expectations. Bulk butter overages range from 0 to 10.75 cents over market value.  (USDA Butter Highlights)

Dry whey prices moved lower across all facets this week. Market tones are somewhat bearish. Although brand specific loads have steadier purchasing activity and are garnering higher prices comparatively, spot market and contract purchasing is moderate overall. Supplies are available to accommodate current contract obligations and spot market interests. Activity from international purchasers is moderate, with mixed indications from industry sources. Class III milk volumes are strong to steady, and cheese manufacturers are running busy schedules, making plenty of liquid whey available for drying. Current market appetite for higher protein concentrates and their price points, are contributing to continued steady dry whey production. The CME cash call continued to be below the $0.30/lb mark this week.  (USDA Dry Whey)