The mercury continues to climb across the Midwest, and dairy producers along the I‑29 corridor are feeling the effects. Hot summer conditions are reducing milk output and component levels, tightening spot milk availability, and pushing manufacturers to pay premiums for additional volumes. As one report notes, “High temperatures are causing milk output and component levels to fall… Spot milk availability has tightened up in most areas”. Cream supplies have also tightened, driving multiples higher across the Central region.
U.S. producers are not alone in the battle against heat stress; Europe is facing similar challenges. Severe heat waves in France and the UK have caused dramatic declines in weekly milk collections. Yet global milk production remains robust, buoyed by gains in South America and Oceania—adding pressure to world markets.
That pressure was evident at the latest Global Dairy Trade auction, where the index fell 4.9 percent. Cheddar prices dropped sharply, though U.S. spot Cheddar proved more resilient, gaining 11.5¢ to reach $1.5475/lb. with 21 loads traded. Tighter spot milk availability may begin to limit cheese manufacturers’ production potential.
Exports remain a bright spot. U.S. cheese shipments climbed 18 percent year‑over‑year in May, with Mexico and South Korea leading growth. Butterfat exports surged as well, more than doubling due to shifting Middle East supply chains. U.S. butter exports to Saudia Arabia increased more than fourfold in May.
Source : iastate.edu