Increase in Milk Supply Underscores Export Vitality
Published: Friday, August 15, 2025
The following is from Lee Mielke, author of a dairy market column known as "Mielke Market Weekly."
You'll recall June milk production was up 3.3% from a year ago. StoneX said, "When you add the stronger components, there was 5.2% more solids to turn into cheese, butter and other products."
The USDA's latest Dairy Products report shows June cheese output totaled 1.203 billion pounds, down 3.9% from May, but 4.2% above June 2024. Total output in the first six months of 2025 hit 7.3 billion pounds, up 1.7% from 2024.
Wisconsin cheese output fell to 297.4 million pounds, down 6.2% from May but was 1.4% above a year ago. California vats produced 209 million pounds, down 5.8% from May but 1.8% above a year ago. Idaho cheese totaled 84.9 million, down 3% from May and 4.4% below a year ago. New Mexico, with 72 million pounds, was down 12.4% from May, but 4.8% above a year ago.
Mozzarella production totaled 403.6 million pounds, up 3.3% from a year ago, with year to date output hitting 2.4 billion pounds, up 1.7% from 2024. American cheese, at 473.1 million pounds, was down 7.1% from May, but was 4.8% above a year ago. YTD American hit 2.9 billion pounds, up 3.9%. Italian-style cheeses totaled 517.4 million pounds, up 1% from May and up 2.4% from a year ago, with YTD at 2.6 billion pounds, up 1.2%.
Cheddar production dropped to 330.3 million pounds, down 25.1 million, or 7.1%, from May, but was up 25.2 million, or 8.3%, from a year ago. YTD Cheddar hit 2 billion pounds, up 5.3% from a year ago.
Butter output dropped to 185.5 million pounds, still a new record for the month of June but down 26.4 million pounds, or 12.5%, from May, while 17.5 million, or 10.4%, more than a year ago. YTD butter hit 1.3 billion pounds, up 4.6%.
Yogurt production totaled 440.3 million pounds, up 11.7% from a year ago, with output for the year so far at 2.6 billion pounds, up 8.1%. Hard ice cream, at 64.9 million pounds, was down 3.9% from 2024. YTD production, at 367.1 million pounds, was down 2.3% from a year ago.
Dry whey output came in at 73.6 million pounds, up 2.1 million, or 2.9%, from May, and 500,000 pounds, or .7%, above a year ago. YTD whey hit 417.6 million pounds, down 7.7% from 2024. Stocks slipped to 58.5 million pounds, down 1.7 million, or 2.8%, from May, and down 4.6 million, or 7.3%, from a year ago.
Nonfat dry milk output dropped to 139.8 million pounds, down 16.5 million, or 10.5%, from May, but was up 12.2 million pounds, or 9.6%, from a year ago. NFDM YTD was 928.3 million pounds, down 1.3% from 2024. Stocks fell to 236.6 million pounds, down 13 million, or 5.2% from May, and down 3.6 million pounds, or 1.5%, from 2024.
Skim milk powder production grew to 53.9 million pounds, up 6.6 million pounds, or 13.9%, from May, but was down 14.9 million, or 21.7%, from a year ago. YTD SMP hit 235.9 million pounds, down 23.9% from 2024.
The Daily Dairy Report points out, "Plentiful cheese production resulted in increased availability of raw whey with manufacturers of whey protein isolates (WPI) in particular capitalizing on the opportunity. WPI production rose 11.1% year over year in June while output of whey protein concentrates increased 4.8% and dry whey production for human consumption climbed 5.8%."
Speaking in the Aug. 11 Dairy Radio Now broadcast, StoneX broker Dave Kurzawski said we're not over producing any dairy product. He pointed to the increased Mozzarella output and attributed that to increased processing capacity, but was a little surprised by nonfat dry milk. Output was a little stronger than expected, he said, but still down from a year ago and inventory was also down. "It's a little strange the market is chopping sideways in the $1.20s, almost as far as the eye can see on the futures," he said, but he doesn't see anything in the report that will move the market one way or the other dramatically.
The increasing milk supply and dairy product output underscores the importance of exports which face headwinds in the global tariff wars. Kurzawski said the domestic market is "critically important but when it's quiet it certainly matters that we can export product and we've been doing that a lot this year."
June U.S. dairy exports soared to 563.1 million pounds, highest level since May 2022, according to HighGround Dairy. "Shipments to Mexico and China surged, up a respective 15.1 million and 23.3 million." HighGround said, "These sales were likely booked in March and may have been front-loaded ahead of Trump's Liberation Day on April 2. Additionally, the weaker dollar and sizable discount that U.S. cheese and butter held to their global competitors also fueled sales."
Cheese exports hit 115.1 million pounds, up 34.4% from a year ago, an all-time high for June, and third month in a row of a record being made. Top destinations included Mexico, South Korea, Japan and Australia.
Butter exports totaled 14.2 million pounds, up 100.4%, strongest total since 2014, according to HGD, and more than double that of June 2024. Total dairy exports to Canada dropped in June, but butter shipments rose 11.1%, with big increases made to Saudi Arabia, Australia and the Netherlands.
U.S. butter prices were at a nearly $1 per pound discount to global competitors in first quarter, says HGD, and that difference grew to almost $1.25 in second quarter, meaning "more butter exports are (likely) on the horizon."
Whey exports, at 38.3 million, were up 20.4%. Nonfat-skim milk powder totaled 131.1 million pounds, down 1.7% from a year ago and down 11.3% year to date.
Cheese imports totaled 33.2 million pounds, down 5.8% from a year ago. Butter imports totaled 6.5 million, down 50.2%.
Interesting footnote: the Aug. 7 Daily Dairy Report states, "Of the more than 7.26 billion pounds of cheese produced in the first half of the year, nearly 9% was routed to the global market compared to 5.1% a decade ago."
Checking prices in Chicago, block Cheddar closed last Friday morning at $1.85 per pound, up 14.50 cents on the week, highest since June 11, but still 10.75 cents below a year ago. The barrels saw their Friday finish at $1.7975, 8.75 cents higher, but 20.75 cents below a year ago when they were trading at $2.0050. There were 14 CME sales of block on the week and three of barrel.
Dairy Market News reports that milk output continues to decline seasonally in the Central region as contacts say recent high temperatures are negatively impacting cow comfort. Mid-week Class III milk prices ranged from $1-under to $2-over. Retail and food service sales remain light. International purchases are steady. Cheesemakers are running steady to lighter schedules as some plants say tight milk and increasing demand from Class I processors was limiting output.
Western cheese manufacturers say milk output is strong enough to keep up with contractual obligations but demand is steady. Milk availability is steady for most of the region but not robust. Cheese output is steady. Domestic demand is steady to light. International buying is steady to strong, thanks to low U.S. prices.
Spot butter hit $2.4625 per pound last Monday but closed last Friday at $2.3550, down 9 cents on the week, fifth consecutive week of decline, lowest since May 21, and 74.25 cents below a year ago, on 17 sales for the week.
HighGround Dairy points out that while the June Cold Storage report was bullish for butter, June butterfat pounds were 5.5% stronger than a year ago.
Cream production is declining in the Central region, following seasonal trends. Ice cream purchasers were reducing their orders and some butter makers were selling cream due to scheduled maintenance. Others were actively churning and some were freezing product for use later in the year. Domestic butter demand remains steady, but light. Export sales are strong, according to DMN.
Western butter manufacturers are getting the cream they need, despite fat components in milk decreasing. Cream demand from ice cream producers is slipping. Plant downtime, churning equipment replacement, and cream prices are still contributing to unsteady spot cream demand from butter producers. Domestic demand is stronger, food service demand is down. Exports are steady.
Grade A nonfat dry milk closed the week at $1.2650 per pound, down 2.25 cents, but 6.50 cents above a year ago, with eight sales put on the board.
Dry whey closed the day and week at 58 cents per pound, up 3 cents, highest since July 9, and 1.75 cents above a year ago, with eight loads exchanging hands.
The USDA's latest weekly slaughter report showed 51,400 dairy cows were sent to slaughter the week ending July 26, up 300 from the previous week, and 200, or .4%, more than a year ago. Year to date, 1,480,000 head had been culled, down 104,800 head, or 6.6%, from a year ago.
Powder and anhydrous milkfat lifted the Aug. 5 Global Dairy Trade weighted average .7%, following a 1.1% gain on July 15. Volume jumped to 81.7 million pounds, up from 53.5 million on July 15, and the highest since Oct. 15, 2024. The average metric ton price slipped to $4,249, down from $4,380.
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