Nonfat dry milk production remains heavy with producers holding inventories more confidently, according to the latest Dairy Market News by the USDA. Higher than anticipated volumes of milk are being directed to cheese plants across the nation. Despite increased inventories of cheese, manufacturers are reporting good sales and are mostly comfortable with the added production.
 

Cheese markets across the U.S. continue to look for a clear price direction. Milk production in the East and Midwest is increasing, and Western milk supplies are building as Arizona and New Mexico near peak production.

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.

Milk production is steady despite colder and wetter conditions in the Southwest. Arizona milk supplies are heavy. In the Northwest, milk supplies are slowly increasing. Output trends in Utah and Idaho are about steady. Farm milk pickups are on the rise in the Midwest at higher than expected levels.

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.

Through the first 10 months of 2012, the volume of major products increased a combined 5.5 percent to more than 2.8 billion lbs. Although growth had softened in recent months, U.S. cheese and whey protein concentrate were poised to shatter volume records, and nonfat dry milk/skim milk powder was tracking at or near record levels. For the second consecutive year, U.S. export volume accounted for more than 13 percent of total milk solids produced in the United States.
 

The market for dairy alternative drinks is growing, fueled by its increasing popularity in the West, where it is moving out of the specialist heath food arena and into the mainstream.