January 17

1/17 - Dairy herd numbers plummeted 122,000 head or 1.3% in just 6 months – and tighter milk supplies are impacting prices. Butter that was still below $2.00/lb in early Dec has jumped to $2.7250 (1/14). Butter output in Nov was 9.6% below a year ago. Butter in cold storage on Dec 1st was down 24.0% from Nov 1st and was 15.9% below a year ago. Block cheese at $1.92/lb (1/14) is up from lows of $1.58 in early Nov. Total cheese output was up 1.6% from a year ago in Nov, but cheddar production – which drives the CME block market – was down 4.4%. Gains in mozzarella (+4.1%) and parmesan (+22.1%) were driven by both holiday and pizzeria demand. In last week’s WASDE, the USDA bumped its 2022 butter price forecast from $1.94 to $2.30/lb, 32.8% above $1.7325 in 2021. USDA raised its 2022 block forecast from $1.7750 to $1.8750/lb, up 11.9% from $1.6755 in 2021.