Over the past few years, Cheddar cheese has accounted for about three-quarters of the total American-type cheese production. But in the second quarter this year, production of American cheese other than cheddar grew “considerably” faster than cheddar production, according to the August Dairy Market Report, which is written and produced by the National Milk Producers Federation, Arlington, Va., and sponsored by Dairy Management Inc., Rosemont, Ill.

None of the major product categories, including combined skim powder and whey categories, showed significant expansion relative to milk production growth during the April-May-June period, after accounting for the decline in fluid product production and the resulting increased availability of milk for manufacture of other products.

Following are excerpts from the report. Read the complete August Dairy Market Report (along with charts and graphs) on NMPF’s website.

“Butter and American-type cheese continued to show the largest year-over-year reductions in export volume during the April-June period. Almost 90% of the drop in U.S. butter exports was to countries in the Middle East and North Africa, particularly Morocco, Saudi Arabia and Egypt. Morocco’s most recent import data, for example, show that the United States lost by far the largest butter volume, while Australia and several European countries gained volume.

“Almost 70% of the loss in American-type cheese export volume was accounted for by Japan, Saudi Arabia, Panama and Mexico. For the same period, Japan’s cheese import data shows the United States, Australia and New Zealand losing the largest volume, while several European countries picked up the most. Total U.S. export losses during the period equaled 1.3% of U.S. milk solids production from the prior year.

“Milk prices in many major milk-producing countries have plummeted to levels that are producing severe financial stress for their farmers. However, on the back of stable domestic consumption, the milk price outlook in this country is generally more positive. Domestic consumption of dairy products has been strong throughout 2015 and has helped to offset both increased milk production and declining U.S. exports. Milk production increases have moderated in recent months and may help to offset weaker Federal order July prices. Feed prices have showed considerable variability this growing season due to the wet spring in parts of the South and Eastern corn belt and then favorable growing conditions of late in the Western corn belt. Milk and feed futures prices indicate the MPP margin will improve during the last third of 2015 following a potential payment as high as $0.50 per hundredweight during the July-August period.

“The largest gains for U.S. dairy imports during April-June were for cheese and milk protein concentrate, while total imports grew by the equivalent of 0.8% of U.S. milk solids production.”