Although the milk production numbers for August weren't released until after the Chicago Mercantile Exchange (CME) spot market trading session on Wednesday of this week, the day's prices for commodity dairy products anticipated the numbers in the monthly report.
On Wednesday afternoon, the milk production report by the National Agricultural Statistics Service (NASS) confirmed the market belief that there was a decrease for August compared to August of 2011 in the top 23 states.
Significant production decreases in several major states resulted in an overall downturn of .2 percent for the month compared to a year ago.
California's production dropped by 203 million pounds or 5.8 percent for a total of 3.299 billion pounds for August. Washington was down by 3.3 percent, Arizona by 3.8 percent, New Mexico by 2.9 percent, and Texas by 1.9 percent.
Wisconsin, however, stood out from the national trend with a 4.9-percent increase for an August record total of 2.313 billion pounds of milk.
Michigan posted a 5.4-percent increase while Colorado's production was up by 6.2 percent. Indiana, Illinois, Ohio, Minnesota, and Iowa all had increases of between 4.1 and 2.5 percent in the August comparisons.
An average decrease of 10 pounds of milk per cow was responsible for the first cutback in milk production in the monthly comparisons since January of 2010. The average milk per cow for August was 1,803 pounds.
As with total milk production, California accounted for a major portion of the 10-pound average decrease as its average dropped by 125 pounds to 1,850 per cow for August.
New Mexico was down by 50 pounds to an average of 2,015 and Washington was down by 35 pounds to 2,005 while Idaho stepped into the top slot for average milk per cow in August with 2,040 pounds.
Wisconsin's average milk per cow in August compared to a year ago jumped by 75 pounds to 1,820 pounds. The averages in Michigan and Minnesota were both up by 50 pounds.
Dairy cow numbers in the top 23 states were up by 32,000, to 8.495 million, compared to August of 2011. The number was down by 4,000 compared to July of this year, however.
Wisconsin's total of 1.271 million head for August was an increase of 7,000 from a year ago.
In its latest report, NASS revised July's milk production downward by 24 million pounds. This put the increase for the month at .6 percent rather than the initially reported .8 percent in the top 23 states.
While milk production was headed downward, dairy commodity prices continued to head upward. On Wednesday of this week, Cheddar cheese blocks and barrels advanced by 4 and 3.25 cents per pound respectively on the CME.
This put the day's closing prices at $1.95 per pound for blocks and $1.9050 for barrels - respective increases of 11 and 10.5 cents per pound from a week earlier.
There were two carload sales of blocks, an unfilled bid for two carloads, and an uncovered offer to sell one carload on Wednesday while the barrel spot market had one transaction in each of the three categories.
The AA butter spot market followed suit with a 1.5-cent gain for a closing price of $1.8675 per pound as the result of one unfilled bid on Wednesday.
The non-fat dry milk spot market was quiet with prices at $1.69 per pound for Grade A and $1.6350 for Grade Extra.
With the spot market price increases, Class III milk futures moved above $20 per hundred again for the final quarter of this year, topped by the $20.80 for November.
Wednesday's prices were in the $19s per hundred for January through July of 2013 before beginning a gradual slide to below $16 by April of 2014.
Dry whey futures prices have risen to a new high of 65 cents per pound for November and December. They were trading at above 55 cents per pound for all months through August of 2013 on Wednesday.
Cooperatives Working Together has announced the acceptance of a group of 19 bids from Dairy Farmers of America, Darigold Cooperative, and United Dairymen of Arizona.
The bids were for financial assistance on the export of 3.32 million pounds of Cheddar and Monterey Jack cheeses and 357,149 pounds of butter.
Deliveries are scheduled to customers in countries in Asia, Central America, and the Middle East from September to February of 2013.