Cheese, Butter, Yogurt Production All Up in March
Published: Friday, May 16, 2025
The following is from Lee Mielke, author of a dairy market column known as "Mielke Market Weekly."
You'll recall March milk production was up .9% from a year ago. The March Dairy Products report shows that more milk was sent to the vat and churn. HighGround Dairy pointed out the March Ag Prices report pegged the fat test average was 4.33%, a record for the month, and when combined with milk output, brought total butterfat pounds to 837.5 million for the month. "This is a 3% year over year gain or 24.4 million pounds higher," says HGD, and "will keep a lid on butter prices for now, but the weaker markets should fuel greater exports, keeping things from plummeting."
Cheese output totaled 1.226 billion pounds, up 9.8% from February, keeping in mind February had one less day due to leap year, but was up 1.4% from March 2024. Revisions added 1 million pounds to February's total. Total output for the first three months of 2025 stood at 3.56 billion pounds, down .6% from 2024.
Wisconsin's March production climbed to 304.4 million pounds, up 7.9% from February, and 2.8% above a year ago. California produced 215.2 million pounds, up 7.3% from February but .1% below a year ago. Idaho contributed 90 million, up 18.3% from February and 1.1% above a year ago. New Mexico, with 76.6 million pounds, was up 14.2% from February but 7.6% below a year ago.
Mozzarella production totaled 405.8 million pounds, down .9% from a year ago, with year to date (YTD) output hitting 1.2 billion pounds, up .2%. American cheese hit 500.2 million pounds, up 13% from February, and 4.6% above a year ago. YTD American hit 1.4 billion pounds, up 2.2%. Italian style cheeses totaled 517.9 million pounds, up 9.2% from February, but .2% below a year ago, with YTD at 1.5 billion pounds, down .2% from 2024.
Cheddar production jumped to 347.7 million pounds, up 40 million pounds or 13% from February, and 17.6 million, or 5.4%, above a year ago. Revisions added 1 million pounds to the February total. YTD Cheddar hit 984.4 million pounds, up 1.7% from a year ago.
Butter output jumped to 229 million pounds, up 26.3 million pounds, or 12.9%, from February, and 18.2 million, or 8.6%, above a year ago. YTD butter hit 649.9 million pounds, up 3.9% from a year ago.
Yogurt production totaled 460.2 million pounds, up 7.2% from a year ago, with output for the year so far at 1.3 billion pounds, up 6.3%. Hard ice cream, at 60.4 million pounds, was up 7.9% from 2024. YTD production, at 175.5 million pounds, was down .5% from a year ago.
Dry whey output climbed to 70 million pounds, up 9.9 million pounds, or 16.5%, from February, but down 9.9 million or 12.4% from a year ago. YTD whey output hit 202.1 million pounds, down 12% from a year ago. Whey stocks grew to 64.2 million pounds, up 1.5 million, or 2.4%, from February, but down 17.1 million pounds, or 21%, from a year ago.
Nonfat dry milk jumped to 168 million pounds, up 21.4 million, or 14.6%, from February, but down 16.8 million pounds, or 9.1%, from a year ago. NFDM YTD came in at 469.3 million pounds, down .4% from 2024. Stocks grew to 263.1 million pounds, up 12.8 million, or 5.1%, from February, and up 44.9 million pounds, or 20.6%, from 2024.
Skim milk powder production, at 34 million pounds, was up 3.2 million pounds, or 10.5%, from February, but was down 4.6 million, or 11.9%, from a year ago. YTD SMP hit 99.3 million pounds, down 32.3% from 2024.
The USDA revised February's nonfat dry milk stocks number down 78 million pounds, according to StoneX broker Dave Kurzawski. Speaking in the May 12 Dairy Radio Now broadcast, he said it was one of the largest revisions ever and supported the futures market. "But it's such a big number that it's a little unsettling. I'm not sure that the markets fully believe that type of number." He said it may be revised but, other than that, production looked "somewhat subdued." Butter output showed a strong number, lactose was up, and cheese was up 1.4%, "which is not earth shattering."
Mozzarella output being down likely speaks to low domestic disappearance, certainly in pizza, according to Kurzawski, but the rise in CME cheese prices last week was based on reality. The export market is red hot, he explained, but if exports drop, we could see cheese drop 20 cents easily. If they stay strong and we turn up domestic demand even a little, it could be 20 cents higher or more. Stocks to use data would dictate $1.90 cheese, he concluded, "But then you look at world prices which are at $2 plus and firming, U.S. prices look pretty cheap."
Speaking of the portside of things, March U.S. dairy exports were up 2.8% from a year ago and hit the highest level in two years, thanks to strong sales of butter, cheese, dry whey and nonfat dry milk. HighGround Dairy reported that the shipments were valued at $842.6 million, fourth-largest figure of all-time.
"U.S. product to Mexico, China and Canada, the top three export markets, all increased year-over-year by double digits," says HGD, however "These sales were likely booked in December and January after President Trump took office, but ahead of the tariffs, suggesting the big swings up were front-loading ahead of what was to come."
Cheese exports hit 108.7 million pounds, down 1.5% from a year ago.
"When adjusted on a 30-day basis, this ranks third all-time, behind March 2024 and February 2025," according to HighGround. "U.S. cheese prices have been at a discount to the rest of the world since October, and that, coupled with the impending tariffs when these deals were made, kept totals lofty."
Butter exports came in at 13.5 million pounds, up 170.8%, the highest monthly volume on a 30-day adjusted basis since April 2014. Canada's imports were up 172% during the month and raised total butter exports through first quarter 94%. HighGround adds "Since February 2025, US CME spot butter has maintained a roughly $1 per pound discount to European and New Zealand product prompting buyers to take advantage of the price disparity."
Exports of nonfat and skim milk powder totaled 142.4 million pounds, up 1.4% from a year ago, though year to date sailings were still down 15.2%. And, the US exported 39.4 million pounds of dry whey, up 8.1% from a year ago.
The first Global Dairy Trade event of May saw the weighted average jump 4.6%, following a 1.6% gain on April 15. Volume slipped to 36.8 million pounds, down from 36.9 million on April 15, and the lowest since May 5, 2020. The average metric ton price climbed to $4,516 up from $4,385.
Lactose again led the gains, jumping 16.8%, after gaining 22% on April 15. Cheddar was up 12%, after slipping 1.8% last time, while Mozzarella was down .3%, following a 5.4% boost. Buttermilk powder and whole milk powder were both up 6.2%, after the whole milk powder gained 2.8% last time. Skim milk powder was up .5%, after slipping 2.3%. Anhydrous milkfat was up 5.4%, following a 2.1% rise, and GDT butter was up 3.8% after gaining 1.5% last time.
StoneX says the GDT 80% butterfat butter price equates to $3.5367 per pound U.S., up 13.9 cents, after gaining 3.4 cents last time, and compares to CME butter, which closed last Friday at a measly $2.33. GDT Cheddar equated to $2.5032, up 27 cents, and compares to last Friday's CME block Cheddar at a bargain $1.8175. GDT skim milk powder averaged $1.2830 per pound, up from $1.2677 last time. Whole milk powder averaged $1.9841 per pound, up from $1.8917 CME Grade A nonfat dry milk closed last Friday at $1.2075 per pound.
HighGround Dairy stated, "It is the end of the season in New Zealand, and as a result, buyers showed up to secure nearby needs amid a tightening supply environment in Oceania and broader volatility in global markets. For example, whole milk powder volume on offer for this event is down 38% from a year ago, with total May volumes the lightest since 2016."
CME Cheddar blocks climbed to $1.84 per pound last Thursday, highest since Feb. 27, but closed last Friday at $1.8175, up 5.75 cents on the week, but 16.25 cents below a year ago. The barrels closed last Friday at $1.77, 1.50 cents higher, but 14.25 cents below a year ago. Sales totaled 43 car of block and 16 barrel.
Central region cheese contacts report mixed demand, according to Dairy Market News. Some say retail cheese sales are picking up as summer draws nearer, but food service demand is declining. Export interest is steady. Inventories are less tight than a few weeks ago but processors say they are not excessive. Cheesemakers were running busy schedules, says DMN.
Milk production is seasonally steady or lighter in the West, but cheesemakers indicate milk is plentiful enough. Cheese production is steady for the most part. Retail demand is steady, food service is moderate to steady, while international demand is stronger. Domestic prices are holding competitiveness.
Cash butter climbed to $2.34 per pound last Tuesday, highest since April 17, then fell back, and closed last Friday at $2.33, unchanged on the week, and 66 cents below a year ago. There were 21 sales on the week.
Cream is plentiful, but ice cream makers are increasingly pulling on inventories, according to DMN. Butter makers are running busy schedules though some report increased demand for cream is pushing multiples higher. Some processors are freezing butter for use later in the year. Domestic butter demand is meeting seasonal expectations. U.S. butter prices are well below international levels and this is contributing to an uptick in export interest, according to DMN.
Milk production is starting to lighten in some parts of the West, but fat component levels are holding. Ice cream production is ticking up and cream multiples were trending higher at mid-week. Retail butter demand is steady to strong but weaker in food service compared to last year. International demand is strong, says DMN.
Grade A powder climbed to $1.2175 per pound last Wednesday, highest since Feb. 24, but it closed last Friday at $1.2075, 1.25 cents higher on the week and 5.50 cents above a year ago, on 22 CME sales for the week.
Dry whey found its way to 55 cents per pound last Wednesday, highest since Feb. 18, as trade talks seemed to ease some with China. It closed last Friday at 54.25 cents, up 2.25 cents on the week, and 15.75 cents above a year ago on 1 sale.
The latest weekly slaughter report showed 47,100 dairy cows were sent to slaughter the week ending April 26, up 1,700 from the previous week, but down 6,200, or 11.6%, from a year ago. Year to date, 882,700 head had been culled, down 86,000 head, or 8.9% from a year ago.
Dairy Margins Recovering
Dairy margins improved over the last half of April on a combination of higher milk prices and lower feed costs, according to the latest Margin Watch from Chicago-based Commodity and Ingredient Hedging LLC. "The milk market continues to recover following a steep decline from the beginning of the year into early April," the MW stated.
"Production continues to expand in the U.S. with a larger dairy herd and increasing components that is helping to expand dairy product availability."
The Margin Watch detailed the latest Milk Production report, which I have previously reported, adding, "The March report detailed a more thorough survey of the U.S. dairy cow herd, showing growth through first quarter with the March herd pegged at 9.404 million head, up 57,000 from last year and 8,000 head larger than USDA's revised February inventory although the March figure was still 1,000 head lower than the initial assessment of the February total."
The Margin Watch stated there was seasonal growth in dairy product stocks in USDA's March Cold Storage report, and pointed out that total butter inventories on March 31 were the largest March butter inventory in 30 years except for the Covid year outlier in 2021. The Margin Watch concluded, reporting that "corn and soybean meal prices have been under pressure as favorable weather has allowed strong planting progress recently across the U.S. Midwest."
The International Dairy Foods Assn. also applauded President Trump's announcement last Thursday that the US and the United Kingdom reached terms for "a significant trade deal between our two markets that promises to expand access for U.S. agricultural goods, reduce tariffs, and remove barriers to trade. IDFA has been advocating for US dairy to be part of those opportunities as we look to improve our bilateral cooperation and build upon the $19.5 million in dairy exports that the United States sent to the United Kingdom last year," the IDFA stated.
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