U.S. milk production gushed in July rising to 17.5 billion pounds, a gain of 3.9% over the prior year, according to USDA’s Milk Production report released this afternoon. Seasonally, however, July’s output is 2.5% less than June’s on a daily average basis. Modest weather conditions east of the Rockies helped cultivate milk production gains. California led the year-over-year gains, up 147 million pounds, followed by Wisconsin (+79 million) and Michigan (+63 million). That said, production from Oregon was down two million pounds followed by Minnesota and New Mexico both down one million pounds vs. the prior year.
The Global Dairy Trade (GDT) auction concluded its 122 event with the index down a slight 0.6% from the previous event. Butter and anhydrous milkfat have arrested their declines for now, with both faring better than the prior event by 4.9% and 3.6%, respectively. Likely the stronger butterfat performance helped support whole milk powder as well. All other products continued to slide, with skim milk powder (SMP) leading the losses, down 12% vs. the last event. For the first time since October 2011, Dairy America did not offer SMP at the GDT.
CME Cheddar blocks traded as low as $2.175/lb. before being bid higher to settle at $2.21 after four trades. A single bid and offer were left on the board. Grade A nonfat dry milk shed another cent to close at $1.365, with a single bid and two offers left on the board. Spot butter turned higher once again, settling up 2.5¢ to $2.66 on a single bid and an above-the-market offer.