Cheese production levels remain high  but  milk production in the Northeast and Mid- Atlantic regions has leveled off,  according to today's Dairy Market News, published by the U.S. Department of Agriculture.

Butter pricing is firming this week, cheese production nationally remains heavy, Northeast milk production is widely believed to have reached a plateau, and California milk output is mostly steady and remains at or near the seasonal peak, reports the USDA this week.

The most advertised cheese category, 8 ounce shredded, has a weighted average advertised price of $2.19, a 6.8% price decrease from last cycle. The average price for 8 ounce blocks, $2.20, is a 5.2% price decrease from the last cycle. 

Strong Class I demand in the East has reduced manufacturing milk supplies. Along with reduced milk production levels this has increased demand for milk and components from other parts of the country. Florida milk production is nearing seasonal lows and imports totaled 96 loads this week.
 

Class I demand continues to be very strong in the Northeast and Mid-Atlantic regions, limiting manufacturing milk supplies. California milk output trends continue to indicate steady to slightly higher gains. Processing plants are running at manageable levels and no issues are expected over the Thanksgiving holiday period. Conditions have been ideal for milk production across Arizona and total output is increasing on a weekly basis. 

Milk supplies available for cheese manufacturing have increased and cheese plants are working additional hours to accommodate the increased volumes Midwest farm milk production is increasing steadily, and California milk production is slowly building.

A combination of three factors: butter prices declining this week to levels last present during mid-July, cream offerings being heavy and expected to increase, and butterfat tests since July substantially above the last few years, all lead to one result - surplus cream

Milk supplies are heaviest in the Northeast, but more manageable compared to the holiday period. Processing plants in the rest of the country are working on reduced schedules as year-end milk supplies are worked through and other fluid handlers and smaller processors have resumed normal intakes.

The USDA's AMS service reported this week that total organic milk products sales for November 2012 were 191 million pounds, an increase of 9% from November 2011.

Aseptically packaged UHT organic milk is currently being exported mostly by national processors, but now some smaller state and regional organic cooperatives want to negotiate export deals for UHT organic milk to Asian countries.