Milk volumes are increasing as nationwide production trends follow their typical seasonal trends, USDA reported today in its weekly Dairy Market News.
As the milk volume increases across the country, manufacturing facilities and balancing plants are becoming more active with their processing schedules, USDA said in the report's "National Dairy Market at a Glance.” In some areas, these operations are already feeling the pressure of increasing milk volumes.
Class I demand varies from one area to another as schools continue to observe spring break.
Cream markets are steady to firm, with cream demand starting to gain momentum for Class II ice cream needs. Favorable weather patterns in many parts of the country are contributing to an earlier-than-usual ice cream and mix buying pattern. Cream prices remain on the firm side with increasing prices for butter and other basing points moving up total cream values. When possible, butter producers continue to absorb as much cream as possible to generate butter stock for current and future needs.
In the report's April Milk Supply and Demand Estimates section, USDA:
- raised its 2010 milk production forecast as the pace of herd reduction falls from last month's level;
- lowered dairy export estimates on a skim-solids due to weaker-than-expected sales early in the year. Both fat and skim-solids basis imports are reduced from last month due to weaker-than-expected imports of cheese. Fat and skim stocks are forecast higher for 2010 as cheese stocks have not declined as expected;
- generally pulled back its product price forecasts from last month as milk production is forecast higher and demand is weaker than expected. The cheese price is reduced as stocks remain high. The butter price forecast is about unchanged from last month as stronger prices in the first half of the year may largely be offset by lower second-half prices as butter production increases. The nonfat dry milk (NDM) price is forecast lower as export demand lags. The whey price is lowered slightly. The Class III price is reduced due to lower cheese and whey prices while the lower price forecast for NDM results in a reduced Class IV price. The all-milk price for 2010 is forecast at $15.45/cwt. to $15.95/cwt.
USDA also noted that during February, about 4.4 billion pounds of packaged fluid milk products are estimated to have been sold in the U.S. This was 0.1% lower than February 2009.
Read the full report at /files/dywweeklyreport.pdf.