There is a seasonal tendency for dairy demand to kick into gear this time of year. With kids back in school, milk demand is strong. With football fans back in full force now that Covid restrictions have lessened, fans are tailgating, having parties in their homes, or are simply enjoying the games at home on the couch.

No matter how you enjoy the weekend usually there is some sort of delicious snack within reach, and odds are, that snack includes some sort of dairy product. At any football party I’ve attended so far this fall, tantalizing tailgate appetizers included some sort of delicious dip that incorporated sour cream or cream cheese, with the go-to staple being a huge cheese tray.

Proof of this increased seasonal demand was seen last week in the dairy industry as the spot cheese block/barrel average jumped 11.3750 cents to finish at $1.9250/lb., the highest weekly close in two months after finding support around $1.80/lb just weeks prior.

According to the dairy team at Total Farm Marketing, “Retail demand is unchanged while food service cheese demand has improved. Mozzarella cheese sales to regional pizzamakers saw a noticeable jump.” That makes sense. Demand for pizza is likely increasing, not only for use in weekend football parties, but with overall food prices creeping higher at the grocery store some families may be incorporating a simple frozen pizza into the mix at supper time.

Demand for cheese is strong, and cheesemakers in the United States are said to be running near capacity. International demand also remains robust for most dairy products.

Solid export demand

U.S. dairy exports in July totaled 236,683 metric tons. This figure was up 9,470 metric tons from July of 2021 but is down 19,005 metric tons from the previous month. Spot butter exports were up an impressive 64% year over year to a new 8-year high! Yet interesting to note, cheese exports hit a five-month low at 37,265 metric tons. Even so, the figure was still up 2% year over year.

Increasing milk supply

Overall milk production has been on a slight uptrend. U.S. milk production in July totaled 18.3 billion pounds, up 0.3% from the same month last year. This is the second month in a row to show a growth in year-over-year production (after starting the year with five reports being lower production year over year).

Milk production per cow averaged 2,033 pounds, up 19 pounds from the same month last year. Total milk cows on farms in the U.S. came in at 9.42 million head which is 67,000 less than July of last year, but up 1,000 head from the previous month. With the next milk production report coming out on Sept. 19, milk prices may hold steady into the weekend.

Currently October Class III milk futures have solid support underneath at $21.00. With spot cheese finding solid buying entering a seasonally strong time period, there are reasons to be optimistic on milk in the short-term. Overhead resistance on October milk is just up at $22.00. Monday’s milk production report may shed light on the next move for dairy.

Reach Naomi Blohm at 800-334-9779, on Twitter: @naomiblohm, and at [email protected].

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