HPAI has been detected in pasteurized milk purchased at stores

Farm milk production continued to struggle in March and remained below a year ago for the ninth consecutive month, thanks to lower cow numbers and little change in output per cow. The last time milk production was down for this long was from Aug. 2003 to Apr. 2004, according to HighGround Dairy (HGD).

The Agriculture Department’s preliminary data showed output at 19.6 billion pounds, down 1.0% from March 2023. The top 24-State total, at 18.8 billion pounds, was down 0.9%. February output was revised up 90 million pounds, or up 0.5% on a daily average basis, from a 1.2% decline to just 0.7%.

March cow numbers totaled 9.335 million head, down 7,000 from February’s count which was revised up 12,000 head but was 98,000 or 1.0% below a year ago. The 24-State count, at 8.881 million, was down 7,000 from February. The February count was revised up 10,000 but is 71,000 head below a year ago.

Output per cow in the 50 states averaged 2,100 pounds, unchanged from a year ago. The 24-state average, at 2,115 pounds, was down three pounds or 0.1%. 

First quarter output totaled 56.9 billion pounds, up 0.1% from a year ago. Cow numbers averaged 9.33 million, down 16,000 from the October to December quarter, and 85,000 less than first quarter 2023.

StoneX points out that the report laps over poor production in March last year as flooding hit California where output was down 2.2%. Output this year was up 26 million pounds or 0.7% from a year ago. Cow numbers were down 1,000 head. Output per cow was up 25 pounds.

Wisconsin was up 27 million pounds or 1.0% from a year ago, thanks to a 20-pound gain per cow and 1,000 additional cows. 

Number three, Idaho was down 1.3%, on a 15-pound drop per cow and 4,000 less cows. Michigan was off 0.3%, due to a 30-pound drop per cow, though cow numbers were up 4,000 head. Minnesota was down 1.4% on 8,000 fewer cows, though output per cow was up 5 pounds. New York was off 0.2%, on a 5-pound drop per cow. Cow numbers were unchanged.

New Mexico again posted the biggest loss, down 15.4% from a year ago, due to a drop of 41,000 cows and 20 pounds less per cow. Texas was down 5.1% on 18,000 fewer cows and a 55-pound drop per cow. Some of those state’s losses may be attributed to the avian-bovine influenza outbreak.

Oregon was down 9.2%, on 10,000 fewer cows and a 25-pound drop per cow. Pennsylvania was off 0.1% on 1,000 fewer cows, while output per cow was unchanged.

South Dakota posted the biggest gain, up 11.2%, thanks to 21,000 more cows and a 5-pound gain per cow. Vermont was down 2.3%, on 2,000 fewer cows and a 15-pound drop per cow. Washington State was down 0.7% on 2,000 fewer cows, though output per cow was unchanged.

StoneX reported that protein in milk pooled in federal orders softened in February but recovered some for March. Combined fat plus protein was up 1.6% from last year. But lower culling and shrinking herd is reflective of a lack of heifer replacements, StoneX warned.

Checking the rear-view mirror; U.S. milk production decreased slightly in 2023 to 226 billion pounds, according to the USDA’s “Milk Production, Disposition, and Income Summary.” Production per cow averaged 24,117 pounds, up 30 pounds from 2022. Cow numbers averaged 9.39 million head, down 14,000 from 2022.

Milk marketings totaled $45.9 billion, down 19.8% from 2022. Producer returns averaged $20.38 per hundredweight, 19.7% below 2022. Marketings totaled 225.4 billion pounds, down slightly from 2022.

Dairy cows moving across state lines must now be tested for bird flu as per USDA’s Animal and Plant Health Inspection Service (APHIS) mandate. The agency found that the same HPAI H5N1 virus genotype that has impacted dairy cows is also affecting poultry flocks. The agency says the disease can spread cattle-to-cattle, as evidenced by transmission via movement between herds. The virus also spreads from dairy cattle premises back into nearby poultry premises.

The media has reported that the influenza had been detected in pasteurized milk purchased at stores, however there’s more to the story. A press release from National Milk states, “The Food and Drug Administration confirmed again that pasteurization of milk consistent with the Grade “A” Pasteurized Milk Ordinance (PMO) destroys harmful pathogenic bacteria and other microorganisms, including Highly Pathogenic Avian Influenza and other viruses. The data cited by FDA is consistent with many other studies demonstrating that the legally required temperature and time for milk pasteurization will readily inactivate HPAI. Viral fragments detected after pasteurization are nothing more than evidence that the virus is dead; they have zero impact on human health. Further, the PMO prohibits milk from sick cows from entering the food supply.”

The latest Livestock Slaughter report showed an estimated 244,600 head were sent to slaughter under federal inspection in March, down 8,100 from February, and 61,600 head or 20.1% below March 2023. 

Dairy cow slaughter for the week ending April 13 totaled 55,100 head, down 2,300 from the previous week, and 5,200 or 8.6% below a year ago. Year to date, 860,300 head have been culled, down 134,100 or 13.5% from a year ago.

The 2023 “Livestock Slaughter Summary” showed 3.08 million dairy cows were slaughtered in 2023, up from 3.05 million in 2022. The highest monthly total, 306,200 head, was in March. The lowest was 224,700 in December.

The USDA’s latest Crop Progress report shows 12% of the U.S. corn crop had been planted, as of the week ending April 21, dead even with a year ago but 2% ahead of the five-year average. 8% of the soybeans were in the ground, also mirroring a year ago, and 4% ahead of the five-year average.

Butter inventories continue to climb and hit 316.6 million pounds on March 31, according to the latest Cold Storage report. Stocks were up 18.9 million pounds or 6.4% from February’s count, which was revised up 1.9 million pounds, and were 7.1 million pounds or 2.3% above those in March 2023.

American type cheese stocks fell to 825.6 million pounds, down 4.9 million or 0.6% from the February level which was revised down 2.3 million pounds and were down 1.2 million pounds or 0.1% from a year ago.

The “other” cheese category holdings hit 610.8 million pounds, up 5 million or 0.1% from February’s count, which was revised 2.4 million pounds lower. Stocks were down 1.2 million pounds or 0.2% from a year ago.

The total cheese inventory stood at 1.459 billion pounds, up 967,000 pounds or 0.1% from February, but 1.2 million pounds or 0.1% below that of a year ago.

Cash butter started the Earth Day Week hitting $3 per pound Monday, a price not seen since Nov. 6, 2023, but finished Friday at $2.97, up a nickel on the week and 61.75 cents above a year ago, on 35 sales for the week.

Midwest butter stocks are widely available, according to Dairy Market News (DMN), despite reported concerns about mid-to longer-term cream availability and summer just months away. Spot cream multiples remain in or around the 1.10s.

Butter production is strong in the West and cream is generally available. Multiples remain flat to above flat market. Domestic butter demand ranges from slightly higher to slightly lighter. Demand from Canadian buyers has been consistent while international demand is moderate, according to DMN.

Block cheddar shot up 8 cents Monday to $1.76 per pound, highest since Oct. 23, 2023, but closed Friday at $1.75, 7 cents higher on the week and 6.25 cents above a year ago. It has gained 35.75 in five weeks.

The barrels jumped 11 cents Monday, hitting $1.77 and closed Friday at $1.7725, up 11.25 cents on the week, highest since Sept. 15, 2023, 18.25 cents above a year ago, and 2.25 cents atop the blocks. Sales totaled 3 of block and 9 barrels.

Central cheesemakers reported “bumps in demand” this week, according to DMN, but it remains to be seen if the shift is a long-term seasonal trend or buyers reacting to price bullishness. Milk availability is “somewhat sideways” and prices at midweek were $3-to $1-under Class III. Some say plant downtime has kept prices this low while others say milk handlers' offers have quieted.

 Western cheese output is strong and milk volumes are meeting needs. Domestic demand is moderate to stronger. International demand is steady to lighter.

Grade A nonfat dry milk fell to $1.1025 per pound Wednesday, lowest CME price since Sept. 12, 2023, but finished Friday at $1.11, down a penny on the week and 6.50 cents below a year ago. There were 12 sales on the week.

Weaker global prices and bleak demand from Mexico continues to pressure prices, says StoneX, but broker Dave Kurzawski stated in the April 29 “Dairy Radio Now” broadcast that, if CME cheese hovers $1.70-$1.80 per pound, Mozzarella processors might tap into the powder supply to fortify their vats.

Dry whey fell to 37 cents per pound Wednesday but closed Friday at 38.25 cents, down a penny on the week but three cents above a year ago, on 7 sales.

Fluid milk sales topped those of a year ago in February by 2.5%, according to the USDA’s latest data, and followed a 2.4% jump in January, however February 2024 had an extra leap day so the data is a bit skewed.

February packaged sales totaled 3.4 billion pounds, up 2.5% from Feb. 2023. Conventional product sales totaled 3.2 billion pounds, up 2.1%. Organic products, at 235 million pounds, were up 7.8%, and represented 6.8% of total sales for the month.

Whole milk sales totaled 1.2 billion pounds, up 4.8% from a year ago, up 5.0% on a year to date basis, and represented 35.1% of total sales for the month. Skim milk sales, at 153 million pounds, were down 11.1% from a year ago.

Packaged fluid sales in the first two months of 2024 totaled 7.3 billion pounds, up 2.4% from 2023. Conventional product sales totaled 6.8 billion pounds, up 2.3%. Organic products, at 493 million pounds, were up 3.7%.

China remains on the sidelines regarding dairy imports, which were down 20% in March from a year ago. HighGround Dairy (HGD) stated, “The third consecutive month of radical import volume declines this calendar year highlights just how light China’s demand has been, and most importantly, continues to be. Year-to-date imports are down 14% from last year and 33% below those in 2022.

“To put perspective on this,” says HGD, “The quantity lost this year amounts to 337,920MT, a massive volume, roughly equivalent to the volume of dairy that Australia exported to China the entire year of ‘22, not to mention 50% more than the same country exported to China in ‘23. China’s demand has reduced so much that it has displaced the volume of one of the top-5 global exporters.”

Whole milk powder volumes were down 14.5% while skim milk powder was down 32.1%. Cheese imports fell 6.7%, with the majority of the decline from New Zealand, according to HGD, while imports from the U.S. were up 44%.

“CME cheddar blocks have been at a heavy discount to New Zealand since November 2023,” says HGD, “which may help to explain the rise in cheese imports. However, EU cheese prices remain competitive with New Zealand, holding a near fifty-cent premium to the U.S. throughout the first three months of the year, suggesting there maybe pockets of demand for EU specific cheese.”

Butter imports were down 30.9% and whey products were down 14.0%.

Tuesday’s GDT Pulse saw 3.85 million pounds of product sold, up from 3.7 million on March 9. There was 335,100 pounds less Instant whole milk powder (WMP) and 451,900 pounds more Regular WMP sold versus the last Pulse, with prices moving lower.

Cooperatives Working Together member cooperatives accepted 38 offers of export assistance this week, capturing sales of 5.7 million pounds of American-type cheese, 353,000 pounds of whole milk powder and 187,000 pounds of cream cheese. The product is going to customers in Asia, Central America, the Caribbean, Middle East-North Africa and South America through September.

In politics, the International Dairy Foods Association (IDFA) submitted written comments this week to the Office of the U.S. Trade Representative (USTR) on “the administration’s objective to develop strategies that support and advance U.S. supply chain resilience as a priority area in trade negotiations, enforcement, and other initiatives.” 

IDFA stated in a press release that it is “grateful to be the only food and agriculture association invited to provide testimony at the USTR public hearing on May 2, 2024. Trade and access to export markets remain critical to the dairy industry, and IDFA will continue to prioritize the issue with this administration.”  

The IDFA also applauded USDA’s final rule updating meal patterns for the National School Lunch and Breakfast Programs. “The updated rule preserves the ability for schools across the country to serve nutritious flavored milk to students in all grades as long as the product meets IDFA’s Healthy School Milk Commitment guidelines, which ensures an 8-ounce half-pint of non-fat or low-fat flavored milk contains no more than 10 grams of added sugar per serving,” says the IDFA, which established the commitment in early 2023 with 37 processors.

Lee Mielke is a graduate of Brown Institute in Minneapolis, Minnesota. He’s formerly the voice of the radio show “DairyLine” and his column appears in agricultural papers across the U.S. Contact him at lkmielke@juno.com.