The Agriculture Department announced the April Federal order Class III benchmark milk price at $15.96 per hundredweight, up 92 cents from March, $1.49 above April 2018, and the highest Class III price since September 2018. The four month average stands at $14.71, up from $14.02 a year ago and compares to $16.17 in 2017.
    Late Friday morning Class III futures portended a May price at $16.38; June, $16.55; July, $16.74; and August at $17.05, with a peak of $17.19 in September.
    The April Class IV price is $15.72, up a penny from March, $2.24 above a year ago, and the highest April Class IV since 2014. The Class IV average now stands at $15.69, up from $13.13 a year ago and $15.03 in 2017.
    California’s 4b cheese milk price was $14.27 in April 2018, 20 cents below the FO Class III price, and its 4a butter powder price was $13.29.
    You’ll recall that preliminary data showed March 50-State milk output at 18.9 billion pounds, down 0.4% from March 2018 and that was evidenced in the May 2 Dairy Products report which pegged March cheese output at 1.1 billion pounds, up 11% from February but 0.7% below March 2018. Year-to-date cheese output is now at 3.2 billion pounds, down 0.3% from a year ago.  
    Cheese output had been moving relentlessly higher since September 2015, but ended its 28-month streak in January, according to the Daily Dairy Report. The DDR stated “Although USDA initially reported year-over-year increases in cheese output in January and February, the agency revised upward its assessment of 2018 cheese output, resulting in year-over-year declines in the first two months of this year.”
    Wisconsin contributed 293.3 million pounds of cheese in the March total, up 12.4% percent from February but 0.7% below a year ago. California produced 209.1 million pounds, up 4.1% from February but 3.1% below a year ago. Idaho contributed 89.7 million pounds, up 25.4% from February and 4.2% above a year ago. Minnesota, with 62.5 million pounds, was up 9.9% from February but 1.4% below a year ago. New Mexico produced 77 million pounds, up 8.2% from February and 1% above a year ago.
    Italian cheese totaled 483.5 million pounds, up 9.6% from February and 0.1% above a year ago. YTD Italian stands at 1.4 billion pounds, up 1.4%.
    Mozzarella, at 378 million pounds, was up 1.4% from a year ago, with YTD at 1.1 billion pounds, up 3.6%.
    American type cheese totaled 435.1 million pounds, up 11.3% from February but 1.8% below a year ago, with YTD at 1.27 billion pounds, down 2.5%.
    Cheddar, the cheese traded daily at the CME, totaled 309.9 million pounds, up 29.1 million pounds or 10.4% percent from February but 10.4 million pounds or 3.2% below a year ago. YTD Cheddar hit 913.9 million pounds, down 4.2%.
    U.S. churns gave us 174.8 million pounds of butter, up 10.3 million pounds or 6.3% from February but 7 million pounds or 3.9% below a year ago. YTD butter is at 529 million pounds, down 0.5% from this time in 2018.
    Yogurt output, at 398.6 million pounds, was up 2.2% from a year ago, with YTD at 1.1 billion pounds, down 1.3%.
    Dry whey totaled 78.4 million pounds, down 14.2%, with YTD whey at 234.6 million pounds, down 13.6%. Stocks totaled 80.2 million pounds, up 5.5% from February and 16.3% above those a year ago.
    Nonfat dry milk production totaled 163.7 million pounds, up 6.4% from February but 8.0% below a year ago. YTD powder is at 490.2 million pounds, down 0.8%. Stocks fell to 288.8 million pounds, down 21.6 million pounds or 7% from February and 8.5 million pounds or 2.9% below the 2018 level.
    Skim milk powder totaled 49.6 million pounds, up a whopping 39.2% from February and 17.9% above a year ago. YTD skim hit 125 million pounds, up 0.7% from a year ago.
    A higher U.S. All Milk price pushed the March milk feed price ratio higher for the third consecutive month. The Agriculture Department’s latest Ag Prices report marks the March ratio at 2.14, up from 2.07 in February and tops the 1.09 in March 2018, the second month to top the previous year since October 2017.
    The index is based on the current milk price in relationship to feed prices for a dairy ration consisting of 51 percent corn, 8 percent soybeans and 41 percent alfalfa hay. In other words, one pound of milk today purchases 2.14 pounds of dairy feed containing that blend.
    The U.S. All-Milk price averaged $17.50 per hundredweight (cwt.), up 70 cents from February and $1.80 above March 2018.
    New Mexico again had the low end at $15.90, followed by Michigan at $16.50. California, at $17.30, was up 80 cents from February and Wisconsin, at $17.30, was up $1 from February.
    The national average corn price averaged $3.61 per bushel, up a penny from February and 10 cents above March 2018. Soybeans averaged $8.52 per bushel, unchanged from February but $1.29 per bushel below a year ago. Alfalfa hay averaged $184 per ton, up $4 from February and $19 above a year ago.
    The March cull price for beef and dairy combined posted another increase, averaging $62.80 per cwt., up $3.90 from February, following a $4.70 gain last month, but is $6.10 below March 2018 and $8.80 below the 2011 base average of $71.60 per cwt.
    Milk cows averaged $1,140 per head in April, unchanged from January 2019, but $220 below April 2018. They averaged $1100 in California, unchanged from January but $200 below a year ago. Wisconsin cows averaged $1130 per head, up $10.00 from January but $190 per head below April 2018.
    The U.S. milk-over-feed margin climbed 64 cents above February’s margin to $8.85 per cwt. based on the Dairy Margin Coverage (DMC) Program calculation, “making it the largest margin since last October,” according to the Daily Dairy Report, “and $2.09 higher than March 2018’s pathetic $6.77.”
    The Agriculture Department’s latest Crop Progress report shows 15% of the nation’s corn crop was in the ground, as of the week ending April 28, up from 6% the previous week, even with a year ago, but 12% behind the five year average.
    The report shows 11% of the cotton crop has been planted, up 2% from the previous week, 1% behind a year ago, and 2% behind the five year average. Also, 3% of U.S. soybeans have been planted, up 2% from the previous week, 2% behind a year ago, 3% below the five year average.
    Traders liked what they saw in the Dairy Products report. CME block Cheddar, after slipping to $1.6550 per pound by Thursday, Jumped 2 cents Friday, to $1.6750, down a penny on the week but a penny above a year ago. The barrels, after holding at $1.63 for five consecutive sessions, shot up 3 1/4-cents Friday, to $1.6625, up 3 1/4 cents on the week and 6 1/4-cents above a year ago. 25 cars of block exchanged hands on the week, 22 on Friday alone, the largest single day trade since March 24, 2011, and 57 cars for the month of April. 25 cars of barrel were sold on the week and 100 in the month.
    Milk remains available for cheesemakers in the Midwest, according to Dairy Market News, but not at the discounts it has seen in spring flushes of the past. Cheese demand reports remain mixed, with some cheesemakers seeing improved sales throughout April and expect similar results for May. Others say orders are slow and point to plentiful supplies as a bearish pull on orders. DMN says “market tones are maintaining that bullish push from early in the year.”
    Western cheese inventories are above what buyers need but are “manageable.” Milk output is plentiful and cheese production is active. While some facilities are running at full schedules, others are reducing output to control supply. Contractual volumes of cheese are moving steadily while other customers are mostly getting what they need in the short-run while being careful about long term commitments. International cheese sales are termed “fair.”
    Butter closed Friday at $2.2725 per pound, up a quarter-cent on the week but 8 cents below a year ago, with 25 sales on the week, 52 for the month of April.
    Cream is still headed for Midwestern churns but plant managers say current prices are nearing their limit and intakes have begun to ebb. Some are primarily finding cream from the West. Producers churning organic cream say those supplies are becoming scant.
    Western butter makers relay that cream, although available, is somewhat tighter and surmise that ice cream manufacturers are taking the extra loads. Butter manufacturing is steady and butter stocks are building. While buyer interest for butter remains strong, it is not enough to overtake production, according to DMN.
    Grade A nonfat dry milk saw a Friday close at $1.0525 per pound, up 1 1/4-cents on the week, highest CME price since October 6, 2015, and 21 cents above a year ago. 11 cars found new homes on the week, 33 for the month of April.
    Dry whey closed Friday at 34 3/4-cents per pound, up 2 cents on the week and 3 cents above a year ago on 10 reported sales for the week; 80 for the month.
    The latest data indicates that March Chinese imports were up 4.8% from 2018, “a bit light in comparison to expectations,” according to FC Stone dairy broker Dave Kurzawski in the May 6 Dairy Radio Now broadcast.
    He believes the figure underestimates food grade imports going into China. FC Stone had expected something like 9%, he said, but he points out that about 80% of the imports are food grade and most come from Oceania.
    New Zealand exports were up 50% in February, according to Kurzawski, and up 80% in March and what may have weighed down the Chinese estimate was the feed grade side of the equation. He blamed the African swine fever situation for the lower imports which has especially hurt U.S. whey exports to that country.
    Tariff issues also remain between the U.S. and China. An FC Stone staffer in their Singapore office recently returned from China and described the tone there as “quietly pessimistic,” according to Kurzawski, who also reported that China’s first quarter gross national product showed a nice 6.4% growth.
    “We don’t know how accurate that number is,” he said, “but it did come in stronger than expected. Bottom line; People in China are still eating food.”
    Speaking of Oceania; DMN reports that dairy industry leaders in Australia are urging dairy producers to increase milk production. “The overall trend the last decade or so has been lower milk output in Australia; the Australian population has grown during the same period. Concerns being voiced are that milk production increases will better buffer a potential need for Australians to import more dairy products as a matter of necessity,” says DMN.
    Very severe dry weather has arrived in New Zealand, especially the North Island as the season winds down and has “noticeably impacted milk production,” according to DMN. “Many herds are now being dried off early in response. The overall season is still expected to yield more milk than last season, as most of the seasonal milk has already been produced. But it increasingly appears the season which began with a bang, may end with a whimper,” concludes DMN.
    Cooperatives Working Together (CWT) members accepted 12 offers of export assistance from CWT this week to help capture sales for 480,608 pounds of Cheddar cheese, 357,149 pounds of whole milk powder, and 480,608 pounds of cream cheese.
    These products are going to customers in Asia, the Middle East and South America from May through August and raised CWT’s 2019 exports to 26.59 million pounds of American-type and Swiss cheeses, 3.96 million pounds of butter (82% milkfat), 1.94 million pounds of cream cheese and 23.44 million pounds of whole milk powder.
    Lawmakers got a firsthand account of what’s happening on U.S. dairy farms. The House Agriculture Committee’s Subcommittee on Livestock and Foreign Agriculture conducted its first hearing this year, choosing dairy, which is suffering its fifth year of low milk prices and second year of trade-related challenges.
    NMPF president and CEO, Jim Mulhern, testified that “Dairy’s challenges reverberate through the U.S. economy, and it’s appropriate that lawmakers put dairy first on its 2019 agenda.”
    Signup for the Dairy Margin Coverage program begins June 17 and the USDA’s new “decision tool,” designed to help farmers determine their appropriate coverage level, is now on USDA’s Farm Service Agency’s website.