The Agriculture Department announced the June Federal order benchmark milk price at $16.27 per hundredweight, down 11 cents from May but $1.06 above June 2018 and is $1.84 above what California’s 4b cheese milk price was in June 2018. While down from May, it’s the highest Class III price since November 2017.
    The $16.27 price equates to $1.40 per gallon, up from $1.31 a year ago, and put the 2019 Class III average at $15.25, up from $14.41 at this time a year ago and compares to $16.12 in 2017.
    Late Friday morning Class III futures portended a July price at $17.34; August, $17.84; with a peak at $17.96 in September before heading back down.
    The June Class IV price is $16.83, up 54 cents from May, $1.92 above a year ago, and the highest Class IV price since November 2015. Its 2019 average now stands at $15.98, up from $13.67 a year ago and $15.08 in 2017.
    The descent in the previous three Global Dairy Trade auctions (GDT) slowed in the 4th of July Week. While it was the fourth consecutive decline, the weighted average of products offered inched just 0.4% lower after dropping 3.8% on June 18, 3.4% on June 4 and 1.2% on May 21. Sellers brought 54.5 million pounds of product to the market, up from 53.4 million in the last event.
    Buttermilk powder led the losses, down 11.9%, followed by butter with a 4.8% decline. Butter was down 5.7% last time. Rennet casein was down 3.9%, anhydrous milkfat was down 1.9%, following a 3.3% decline, and GDT Cheddar was down 1.5%, which follows a 4.3% decline. Lactose was off 1.1%.
    Like the June 18 event, there was only one product in the black but this time it was skim milk powder, up 3.2%, after a 3.5% decline last time.
    FC Stone equates the GDT 80 percent butterfat butter price to $1.9199 per pound U.S., down 9.5 cents from the June 18 event. CME butter closed Friday at $2.4050. GDT Cheddar cheese equated to $1.7037 per pound, down 1.1 cent from the last event and compares to Friday’s CME’s block Cheddar at $1.8475. GDT skim milk powder averaged $1.1020 per pound, and compares to $1.0696 last time. Whole milk powder averaged $1.3465, down from $1.3637 last time. CME Grade A nonfat dry milk closed Friday at $1.04 per pound.
    Just in case you’re wondering, buttermilk powder is used in baked goods, biscuits, cakes, as well as soups and sauces.
    Meanwhile, U.S. cheese exports remained the small bright spot in May export data, according to HighGround Dairy (HGD), “climbing back higher versus the prior year after an April decline but remaining stronger year to date, even when compared to good exports during first half 2018.”
    “Mexico remained the top destination for U.S. cheese even as exports slipped 10% or 2 million pounds year over year. South Korea was up 18% YoY, and Japan was up 47%,” says HGD, but Indonesia was in a “surprise fourth place,” with total cheese exports up 407% or 2.3 million pounds.
    “Nonfat dry milk exports were below a year ago for the seventh consecutive month but total volumes shipped in May represented the strongest monthly exports since May 2018. Mexico remained the top destination for U.S. shipments with 52% market share even as exports remained down YoY for the third consecutive month, falling 1%.”
    May butter exports continued sharply lower, posting the steepest year over year decline since August 2016. HGD says “Canada continues to drive the decline with May exports traveling north down 41% YoY. Year to date exports to Canada are down 26% or 2.7 million pounds versus Jan-May 2018. On a positive note, South Korea continued to be a large buyer of U.S. butter into May, up 96% YoY in the month and up 129% year to date.”
    The report also showed U.S. butter imports were up 15.4% from April and 105.8% above May 2018, with YTD imports up 61.7% from a year ago.
    Matt Gould, editor and analyst with the Dairy and Food Market Analyst newsletter, said the “sluggish” butter production in the U.S. stood out in the May Dairy Products report issued July 3 but added that butter imports remain “relatively minor.” The exception is Irish butter, which he called “a premium product that doesn’t do much to influence prices.”
    Speaking in the July 8 Dairy Radio Now broadcast, Gould also pointed out that while U.S. cheese exports, were “robust,” considering how much higher U.S. cheese and butter prices are to the rest of the world, overall exports only accounted for 14.4% of U.S. milk production. A year ago, it was about 18.6%.
    Cooperatives Working Together (CWT) member cooperatives accepted 19 offers of export assistance this week to sell 207,235 pounds of cheese; 341,717 pounds of cream cheese, and 2.235 million pounds of whole milk powder.
    The product will go to customers in Asia, South America, and Oceania through October and raised CWT’s 2019 sales to 30.95 million pounds of American-type and Swiss cheeses, 154,324 pounds of anhydrous milkfat, 4.2 million pounds of butter (82% milkfat), 3.14 million pounds of cream cheese and 35.6 million pounds of whole milk powder.
    The products will go to 26 countries and are the milk equivalent of 669.4 million pounds of milk on a milkfat basis, according to the CWT.
    You’ll recall that preliminary data showed May 50-state milk output hit 19.06 billion pounds, down 0.4% from May 2018. The July 3 Dairy Products report shows that more milk went to the cheese vat. Total cheese output climbed to 1.10 billion pounds, up 1.5% from April and 1.6% above May 2018. Year-to-date total cheese output stands at 5.4 billion pounds, up 0.7% from a year ago.
    Wisconsin produced 287.8 million pounds of the May total, up 2.2% percent from April and virtually unchanged from a year ago. California produced 211.3 million pounds, down 0.4% from April and 2.6 below a year ago. Idaho contributed 78.2 million pounds, down 6.7% from April but 1.0% above a year ago. Minnesota, with 63.0 million pounds, was up 6.1% from April but 1.0% below a year ago. New Mexico vats provided 81.8 million pounds, up 3.5% from April and 6.9% above that of a year ago.
    Italian cheese totaled 471.5 million pounds, down 1.1% from April but 2.3% above a year ago. YTD Italian stands at 2.36 billion pounds, up 2.5%.
    Mozzarella output was at 370.5 million pounds, up 3.2% from a year ago, with YTD at 1.86 billion pounds, up 4.4%.
    American type cheese totaled 440.7 million pounds, up 2.1% from April but 0.5% below a year ago, with YTD at 2.14 billion pounds, down 1.9%.
    Cheddar output, the cheese traded at the CME, climbed to 319.4 million pounds, up 11.8 million pounds or 3.8% from April and 0.2% above a year ago. YTD Cheddar hit 1.54 billion pounds, down 3.0% from 2018.
    Butter output slipped. U.S. churns produced just under 163 million pounds, down 1.7 million pounds or 1.0% from April and 7.1 million pounds or 4.2% below a year ago, the fourth consecutive month output was below a year ago. YTD butter output is now at 855.4 million pounds, down 2.5% from 2018.
    Revisions lowered the April total by 2 million pounds, down 6% from a year ago, compared to the originally reported 4.8% shortfall.
    Yogurt output, at 349.4 million pounds, was down 6.4% from a year ago, with YTD at 1.8 billion pounds, down 1.8%.
    Dry whey totaled 78.8 million pounds, up 5.1% from April but 8.2% below a year ago, with YTD at 386.3 million pounds, down 12.8%. Whey stocks totaled 64.7 million pounds, down 14.2% from April and 5.7% below those a year ago.
    Nonfat dry milk production totaled 173.9 million pounds, up 5.3% from April and 5.0% above a year ago. YTD powder is at 829.4 million pounds, virtually unchanged from 2018. Stocks grew to 281.8 million pounds, up 6.4 million pounds or 2.3% from April and 11.3 million pounds or 4.2% above the 2018 level.
    Skim milk powder output fell to 30.1 million pounds, down 14.9 million pounds or 33.1% from April and 20.3 million or 40.2% below a year ago. YTD skim hit 197.2 million, down 11.9% from a year ago.
    Cash dairy prices were lower in the shortened 4th of July holiday Week. The Cheddar blocks closed Friday at $1.8475 per pound, down a penny on the week, ending six weeks of gain, but were 30 1/2-cents above a year ago. The barrels found themselves at $1.78 Friday, also a penny lower on the week, 53 1/2-cents above a year ago, and 6 3/4-cents below the blocks. There were 14 cars of block traded on the week at the CME and 19 of barrel.
    Dairy Market News reports that Midwestern cheese demand was generally unchanged week to week. Some cheesemakers, particularly mozzarella and provolone producers, are still seeing positive ordering trends. Curd and barrel producers also reported stronger sales with outside festivities in full swing. Other producers of varietal/specialty cheeses are experiencing an expected slowdown. Cheese output has picked up some and spot milk is available at discounts.
    Looking westward, cheese exports were reported to be mixed while domestic demand is unchanged. Inventories are balanced to a bit tight. With declining milk components and supplies, Western cheese output fluctuates, says DMN.
    Butter saw a Friday close at $2.4050 per pound, down a half-cent on the week but 23 1/2-cents above a year ago, with only 2 cars trading hands on the week.
    The strong U.S. price is a magnet to imports and while imports may act somewhat as a governor on how high the U.S. price goes, it’s not likely we will return to a price below $2 any time soon. The last time U.S. butter was below $2 was Nov. 15, 2016. The all-time high was $3.1350 on Sept. 25, 2015.
    Some Midwest butter plant managers reported finding cream at prices within their reach, at least during the holiday week. Cream was more available within the region and from the West, as both butter/other production plants took time off for the holiday weekend. As rising temperatures hit large areas of the region, cream is predicted to tighten. Butter demand is steady, keeping availability manageable.
    Western butter orders were “not so good compared to the previous week,” according to DMN. Churning activities had slowed because several plants prepared to close for the holiday, thus cream was more available.
    Spot Grade A nonfat dry milk closed Friday at $1.04 per pound, down a penny on the week but 26 3/4-cents above a year ago, with no sales reported on the week.
    CME dry whey saw a Friday finish at 32 3/4-cents per pound, down three-quarter cents on the week and 6 1/4-cents below a year ago, on 1 sale for the week.
    One of the biggest factors in the whey market is African Swine Fever (ASF), as whey is a big component in feeding pigs. The Food and Agriculture Organization of the United Nations reports that ASF “continues to spread within East and Southeast Asia, leading to the death and the culling of millions of pigs. The disease poses a serious threat to the livelihood and food security of large numbers of people relying on the production and processing of pigs.”
    Back on the home front; the Agriculture Department’s latest Crop Progress report shows 94% of U.S. corn has emerged, as of the week ending June 30. That’s up from 89% the previous week but 6% below a year ago and the five year average. 56% of the crop is rated good to excellent, down from 76% a year ago.
    Ninety-two percent of U.S. soybeans are in the ground, up from 85% the previous week but 8% behind a year ago, and 7% below the five year average. 83% have emerged, down from 98% a year ago and 12% behind the five year average. 54% are rated good to excellent, down from 71% a year ago.
    Fifty-two percent of the cotton crop is rated good to excellent, up from 43% a year ago.
    World Dairy Expo is accepting entries for its 53rd annual Dairy Cattle Show, Oct. 1-5, 2019, in Madison, Wisconsin. New this year, online and paper entry forms are due Sept. 8. Late entries may be submitted online through Sept. 19, and paper entries will be honored until the day of the show, both for an increased fee.
    New to the Dairy Cattle Show, a Summer Junior Two-Year-Old Cow Class has been added to the International Holstein Show, International Junior Holstein Show, International Red & White Show and International Junior Red & White Show. Animals exhibited in this class are born between June 1, 2017 and Aug. 31, 2017 and in milking form at WDE.