February 10

2/10 – U.S. milk production was down 0.5% vs a year ago in Dec, following a 0.4% decline in Nov. Highly Pathogenic Avian Influenza in California dairy cows is the main reason. Milk output in CA (20% of total U.S.) was down 8% in Nov/Dec vs a year ago. HPAI reduces a cow’s ability to produce milk - and milk from cows with HPAI must be taken off the market. As a result, CA cheese production dropped 3.3% in Nov and was down 2.3% in Dec vs 2023. CA butter output was down 13.2% in Nov/Dec. But the rest of the country is compensating with overall U.S. cheese output down just 0.7% in Dec and butter output up 2.3%. California should be fully recovered from HPAI-related dairy losses by March. CME block cheese closed at $1.86/lb on Friday (2/7). Block prices are averaging $1.88/lb ytd in 2025, up sharply from $1.54 in 2024. Conversely, butter at $2.38/lb (2/7) is averaging $2.51 ytd, down from $2.65 in 2024.