January 9, 2017

Cheese Absorbs Bolstered Milk Production

 |  By: Know Your Market

By Mike North, Commodity Risk Management Group

Over the last two months USDA has reported monthly milk production has exceeded last year’s volumes by more than 2%. The question that naturally follows those numbers is where will all this milk go?

Last week the USDA provided some insight to that question with the November dairy products report.

There were certainly some winners and losers. At the highest level the biggest losers were those products that depend on cream. It shouldn’t come as a big surprise that Americans don’t demand as much ice cream in the fall, but along those lines we also produced less in the month of November relative to 2015. Ice cream production was down 5.3%, sherbert fell 22.1% relative to its 2015 production and the champion of that space, butter was down 5.7% with 144 million pounds making its way through the churns.

On the flip side of that milk did find its way into other product categories, namely cheese. As we look at total cheese output it was 1.01 billion pounds, 2.7% above November 2015. This was led by American cheese which was up 3.9% above 2015’s production and Italian cheeses which were up 2.6% above November 2015.

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